XAG/USD Price Analysis: Silver Consolidates after Wednesday’s rally

• XAG/USD slightly retreated to $24.15 after rallying more than 3% on Wednesday.
• Jackson Hole Symposium kicked off, where Chair Powell will speak on Friday and Christine Lagarde on Saturday.
• Following strong US Jobless Claims, US yields are rising, limiting the metal’s advance.

The Silver spot price XAU/USD traded with losses on Thursday, mainly driven by a stronger USD and investors taking profits after Wednesday’s rally. The US reported strong labour market data while the annual Jackson Hole Symposium kicked off at Kansas City, where Jerome Powell will deliver a speech on Friday.

The latest Jobless Claims data from the US  from the second week of August underscores the labour market's resilience. The number of people filling for unemployment benefits reached 230,000, lower than the consensus estimate and the prior count of 240,000. Concurrently, the Durable Goods report for July revealed a significant softening, droping by 5%, higher than the expctations of a 4.2% decline.

Reacting to the data, the USD trades strongly on rising US yields, often seen as the cost of holding non-yielding metals. The 2-year yield rose to 5%, while the 5- and 10-year rates advanced towards 4.40% and 4.22%. In addition, a stronger USD and limits the XAG/USD advanced as the DXY index jumped to the 103.80 area.

Markets focus now shifts to Jerome Powell’s speech on Friday. As the Federal Reserve (Fed) stated, decisions will remain data-dependent so investors will pay close attention in the Fed’s Chairman stance. As for now, manufacturing and services PMIs from the US showed weakness while inflation decelerated, and the labour market still shows strength. Regarding expectations, markets still bet low odds of 35% of a 25 basis point (bps) in the November meeting, according to the CME FedWatch tool. 

XAG/USD Levels to watch

As per the daily chart analysis, the XAG/USD has a bullish technical bias for the short term. The Relative Strength Index (RSI) also exhibits a negative slope above its midline while Moving Average Convergence Divergence (MACD) displays green bars. Furthermore, the pair is above the 20,100,200-day Simple Moving Averages (SMAs9, indicating a favourable position for the bulls in the bigger picture.

Support levels: $24.00 (20-day SMA), $23.70, $23.50

Resistance levels: $24.30, $24.50, $24.80

XAG/USD Daily chart