Silver Price Forecast: XAG/USD extends upside above $23.20 ahead of Fed policy

• Silver price jumps to near $23.20 as geopolitical tensions deepen.
• Forward action in the FX domain will be guided by the Fed’s monetary policy.
• Investors will focus on the US JOLTS Job Openings data in today’s session.

Silver price (XAG/USD) climbs above $23.20 in the early European session. The white metal has capitalized on mounting Middle East tensions, which have improved appeal for safe-haven assets. However, forward action will be guided by the interest rate decision from the Federal Reserve (Fed), which will be announced on Wednesday.

S&P500 futures have posted some losses in the Asian session, portraying a decline in the risk-appetite of the market participants. The US Dollar Index (DXY) has rebounded above 103.50 amid uncertainty ahead of the Fed’s policy. 10-year US Treasury yields have dropped to near 4.05%.

Considering poll from the CME Fedwatch tool, traders are confident that interest rates will remain unchanged in the range of 5.25-5.50%. Investors’ expectations for the first rate-cut decision by the Fed have shifted for May against earlier expectations of March. The US economy is performing well on the grounds of labor market and consumer spending, which could keep price pressures unabated.

Before Fed’s policy, investors will focus on the US JOLTS Job Openings data for December, which will be published at 15:00 GMT. According to the estimates, US employers advertised fresh requirement of 8.75M jobs, slightly lower from 8.79M in November.

Silver technical analysis

Silver price advances towards the resistance zone placed in a narrow range around $23.50 on a two-hour scale. The 50-period Exponential Moving Average (EMA) at $22.90 continues to provide support to the Silver price bulls.

The Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which indicates that momentum has leaned towards the upside.

Silver two-hour chart