Silver price forecast ahead of Powell testimony, NFP data

Silver price is moving sideways this week as the market waits for cues from the Federal Reserve chair. It is also reacting to the ongoing political gathering in Beijing by the Communist Party. Silver was trading at $21 on Tuesday morning, where it has been in the past few days.

China and US economic events

The XAG/USD price is having numerous catalysts this week. The first one is the ongoing political gathering in Beijing, where officials are deliberating on the future of the country. In a statement, China said that its growth target for this year will be 5%, a mild improvement from its performance in 2023.

China is an important player in the silver market considering. Like other metals, it is the biggest industrial consumer of silver. Also, it plays an important role in silver recycling. China manufactures most silverware items like jewelry, solar panels, and kitchenware. 

Silver price action will depend on other events scheduled for this week. First, Jerome Powell, the Federal Reserve chair, will deliver testimony in Congress. In it, he will talk about the state of the economy and provide cues about what to expect in the near term. Analysts believe that he will provide hints of more hikes.

Silver and other assets will likely react to one word: deflation. In his previous statement, he said that the US was in a state of deflation but the only limitation was the low unemployment rate. The rate stands at a historic low of 3.4%.

The other key catalyst for the XAG/USD will be the upcoming US non-farm payrolls (NFP) data scheduled for Friday. Economists expect the data to show that the jobless rate remained at 3.4% as the economy continued adding jobs.

US inflation data ahead

silver price
XAG/USD chart by TradingView

Silver price will next react to upcoming America’s consumer price index (CPI) data scheduled for Tuesday next week. Economists believe that inflation remained stubbornly high in February as gasoline prices stayed above $3. 

A higher inflation figure is usually bearish for silver because it will push the Fed to continue hiking interest rates. Silver, just as gold, does well in a period of low-interest rates and loose monetary policy.

Silver price has held quite well in the past few days after it found a strong support at $20 last month. It is consolidating at the short and medium-term moving averages while the RSI is moving sideways. Therefore, silver will likely remain in this range ahead of these economic events. A bearish breakout to $20 cannot be ruled out.

Source: https://invezz.com/news/2023/03/07/silver-price-forecast-ahead-of-powell-testimony-nfp-data/