Silver (XAG) Forecast: $30.60 Pivot Holds as Market Awaits Powell’s Rate Clues

Prices Drop but Await Powell’s Speech for Market Direction

Silver prices fell sharply on Wednesday but remained within their established range of $29.64 to $31.54. Traders are focused on Federal Reserve Chair Jerome Powell’s speech later today, which is expected to provide critical insights into the Fed’s monetary policy outlook and potentially drive the next significant move in silver prices.

At 13:14 GMT, XAG/USD is trading $30.49, down $0.54 or -1.73%.

Technical Levels Define Short-Term Range

Silver continues to trade within a narrow $2.00 range, with $30.60 acting as a key pivot level for the market. A move below $29.64 would signal further bearish momentum, while a breakout above $31.54 could reverse the trend to bullish. The 50-day moving average at $31.71 remains a strong resistance point, with its breach required for a more significant upward move.

The current technical setup suggests indecision, but Powell’s remarks could provide clarity on the market’s next direction.

Fundamental Drivers and Safe-Haven Support

Despite the recent dip, silver has found some support from safe-haven demand as geopolitical tensions in South Korea and France add to market uncertainty. In South Korea, lawmakers have called for President Yoon Suk Yeol’s resignation, while in France, no-confidence motions threaten Prime Minister Michel Barnier’s government.

At the same time, the U.S. dollar index remains strong, adding downward pressure on silver. The stronger dollar makes silver more expensive for holders of other currencies, counterbalancing its safe-haven appeal.

Powell’s Speech in Focus

All eyes are on Powell’s address in New York, where he is expected to discuss the U.S. economy and monetary policy in a moderated discussion. Markets are particularly interested in his comments on inflation and future rate cuts ahead of the Fed’s Dec. 17-18 meeting. Current market odds suggest a 74% probability of a 25-basis-point rate cut, according to CME Group’s FedWatch Tool.

Powell’s insights will complement this week’s other key events, including today’s ADP employment report and Friday’s nonfarm payrolls data. Both reports could further shape expectations for the Fed’s next moves, with labor market conditions being a critical factor.

Market Forecast

Silver prices are expected to remain within their current range in the near term, but Powell’s speech today could act as a catalyst for a breakout. A dovish tone may weaken the dollar and bolster silver prices, while a more hawkish stance could push prices lower.

Traders should watch for a break above $31.71 for a potential rally or a drop below $29.64 for confirmation of a bearish trend. Powell’s remarks, combined with upcoming jobs data and next week’s CPI report, will play a decisive role in silver’s price action heading into December.

More Information in our Economic Calendar.