Silver Price Forecast: XAG/USD corrects to $24 despite hopes of Fed’s soft landing remains abated

• Silver price corrects further as the US Dollar remains firm due to stable job growth.
• Fed Mester that demand and supply in the labor market is coming into a better balance.
• Silver price demonstrates a Broadening Triangle chart formation.

Silver price (XAG/USD) extends its correction to near the crucial support of $24.00 even though investors hope that the Federal Reserve (Fed) is done with hiking interest rates. The white metal remained offered from Thursday but the broader trend is still positive as the tight United States labor market starts cooling down.

S&P500 futures remain lackluster as US markets are closed on account of Labor Day. Due to the extended weekend, weak volume is expected in the FX domain too. Also, the market mood is quiet due to an extended weekend.

The US Dollar Index (DXY) looks set to extend recovery above the immediate resistance of 104.20 as job growth remains solid in August.

Cleveland Fed Bank President Loretta Mester said on Friday that demand and supply in the labor market is coming into a better balance but the job market is still strong. She further added that while job growth has slowed and job openings are down, the Unemployment Rate is low.

Also, US Manufacturing PMI for August increased to 47.6 from 46.4 in July but remained below the 50.0 mark, which itself shows a contraction in activities. After factory activities, investors shift focus to the Services PMI for August, which will be published on Wednesday.

Silver technical analysis

Silver price demonstrates a Broadening Triangle chart formation on a two-hour scale. The downside is supported near the horizontal resistance plotted from August 25 low around $23.92. A declining 20-period Exponential Moving Average (EMA) indicates that the mid-term trend is bearish. The Relative Strength Index (RSI) (14) shifts into the bearish range of 20.00-40.00, which indicates that a bearish impulse is already active.

Silver two-hour chart