Silver Price Forecast: XAG/USD retreats from $23 as Fed Powell supports more rate hikes

• Silver price falls after a short-lived pullback to near $23.00 as Fed Powell leans toward further policy tightening.
• Fed Barkin is less optimistic about progress in inflation easing towards 2%.
• Silver price trades in a Descending Triangle pattern, which indicates a sharp contraction in volatility.

Silver price (XAG/USD) fell sharply after facing selling pressure near the crucial resistance of $23.00. The appeal for bullions has dented significantly as investors see Middle East tensions remaining contained between Israel and Palestine.

S&P500 futures remain subdued in the European session, portraying a cautious market mood as Fed Powell is not confident that current interest rates are sufficiently high to bring down inflation to 2%. More interest rate hikes from the Fed would dampen business investment and household spending.

Richmond Fed Bank President Thomas Barkin is less optimistic about progress in inflation easing towards 2%, he remained unsure about raising rates further. Fed Barkin sees some slowdown as higher interest rates have started hitting the economy.

The US Dollar Index (DXY) gathers strength to climb above the immediate resistance of 106.00 as expectations that the Fed is done with hiking interest rates are peaking now. 10-year US Treasury yields hover around 4.6%.

Going forward, investors will focus on the inflation data for October, which will be released next week. The inflation data will set an undertone for the Fed’s monetary policy in December.

Silver technical analysis

Silver price trades in a Descending Triangle chart pattern on a two-hour timeframe, which indicates a sharp contraction in volatility. The white metal remains cushioned near $22.40 while the downward-sloping trendline from October 30 high at $23.60 continues to act as a barricade for them.

The Relative Strength Index (RSI) (14) oscillates in the 40.00-60.00 range, which indicates a consolidation ahead.

Silver two-hour chart