Silver price is trading higher as the market digests Fed officials’ remarks regarding the ongoing inflation fears. During his speech at the Annual Monetary and Trade Conference, Fed Governor Christopher Waller indicated that the expected inflation will be transitory. Prior to that, Richard Clarida, the Fed Vice Chair held a similar position during his interview with CNBC.
As a reaction to Fed officials downplaying inflation fears, the dollar index is trading at $90.35, which is close to the 11-week low hit last week at $90. Notably, silver price has an inverse correlation with the value of the US dollar. As such, easing of the inflation concerns is a bullish catalyst for the precious metal.
In the ensuing sessions, investors’ focus will be on the FOMC meeting minutes scheduled for Wednesday. The Federal Reserve maintains that while the US economy has made significant strides towards recovery, it is still uneven and incomplete.
Silver Technical Outlook
Silver price has extended its gains from Friday’s session. At the time of writing, it was up by 12% at 27.75. On a two-hour chart, it is trading above the 25 and 50-day exponential moving averages. In my opinion, it is likely to find resistance at 27.77. Subsequently, the bulls are likely to gather enough momentum to push the price to 28. If that happens, it will be its highest level since 25th February. However, this thesis will be invalidated by a move below 27.50.