Silver Prices Forecast: XAG/USD Higher as Powell’s Speech Looms, Middle East Unrest Persists

Highlights

• Silver surges on Middle East tensions
• Powell’s speech a potential market mover
• China’s Q3 data bolsters silver prices

Safe-Haven Silver Rides Geopolitical Tensions to Two-Week High

Silver prices (XAG/USD) surged to a two-week peak, driven largely by rising geopolitical tensions in the Middle East. This run contradicts the robust U.S. economic data that typically propels investors toward higher-yielding options. As it stands, silver, alongside gold, remains the preferred safe-haven asset as conflicts continue to escalate.

Upcoming Powell Speech: A Critical Event

Fed Chair Jerome Powell’s imminent speech is generating considerable attention among silver traders. Recent U.S. retail sales figures came in surprisingly strong, lifting Treasury yields and generally exerting pressure on non-yielding assets like silver. However, the persisting geopolitical concerns seem to be counterbalancing the impact of higher interest rates, as traders stay committed to safe havens.

China’s Robust Economy Adds Fuel to the Fire

Another contributing factor to silver’s rise is China’s stronger-than-expected economic data for the third quarter. As one of the largest consumers of silver, positive economic performance from China is being interpreted as a signal for sustained demand, providing additional support for the metal’s current upward momentum.

Overall Bullish Sentiment, But Powell’s Speech a Wildcard

In sum, market sentiment for silver is veering on the bullish side. The momentum is being fueled by ongoing geopolitical uncertainties and promising economic figures out of China. Nonetheless, the future landscape may shift dramatically depending on what Fed Chair Jerome Powell has to say about U.S. monetary policy. His comments are widely seen as the next potential turning point for silver markets.

Technical Analysis

The current daily price of Silver (XAG/USD) at $23.02 is slightly below the 200-day moving average of $23.33 but above the 50-day moving average of $22.91. This mixed signal suggests traders are uncertain, albeit with a bullish lean given its position above the 50-day line.

The asset is also trading above its previous close of $22.80 and near minor resistance at $23.55. The trend line resistance at $24.25 serves as the next critical hurdle. A breach above this could instigate more bullish activity, while falling below the trend line support at $22.21 may shift sentiment to bearish. Overall, the market sentiment appears cautiously bullish.