- Silver prices are trading in a tight range around $31 amid uncertainty over the outcome of China’s third plenary session.
- Strong Fed rate cut hopes keep the short-term outlook for Silver price bullish.
- Investors are awaiting Fed’s Powell’s speech for fresh guidance on interest rates.
Silver (XAG/USD) price is consolidating in a tight range near $31.00 in the North American session on Monday. The white metal is struggling to find direction as investors await Federal Reserve (Fed) Chairman Jerome Powell’s speech at the Economic Club of Washington, scheduled for 16:30 GMT.
Fed’s Powell’s comment will indicate when the central bank will start cutting interest rates. Currently, financial markets are confident that the Fed will pivot to policy normalization from September. Strong speculation about Fed rate cuts in September has weighed heavily on the US Dollar (USD) and bond yields.
The Dollar Index (DXY), which tracks the value of the greenback against six major currencies, sees further downside below the immediate support of 104.00. The 10-year US Treasury bond yields rose to 4.22% but are near a four-month low. A low interest rate environment is unfavorable for the US dollar and bond yields.
Despite the Fed’s firm rate cut outlook, the near-term outlook for the silver price is uncertain due to China’s four-day third plenary meeting, which is scheduled for next week. The Chinese Communist Party is expected to take steps to boost the property and manufacturing sector.
Meanwhile, weaker-than-expected second-quarter GDP growth in China has deepened uncertainty over demand for silver as an industrial metal in the manufacturing and automotive sectors.
Technical analysis of Silver
Silver price is holding the breakout of the descending channel chart formation on a daily time frame. The upsloping 20-period exponential moving average (EMA) near $30.30 continues to provide support to the silver price bulls.
The 14-period RSI is struggling to break above 60.00. A decisive break above it would push the momentum to the upside.
Silver four-hour chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
