Silver Price Forecast: XAG/USD holds onto gains above $23 ahead of FOMC minutes

• Silver price clings to gains ahead of Fed minutes.
• The confidence of Fed policymakers that inflation is in the right direction has dampened the USD Index’s appeal.
• Silver price is expected to deliver stellar gains amid a Descending Triangle breakout.

Silver price (XAU/USD) turns sideways around $23.15 after a strong recovery in the European session on Wednesday. The white metal clings to solid gains as the US Dollar has shifted to the backfoot AS Federal Reserve (Fed) policymakers are confident that the secular inflationary trend is in the right direction despite a one-time rise in price pressures in January

Mixed action is being observed in risk-perceived assets ahead of the release of the Federal Open Market Committee (FOMC) minutes. While S&P500 futures are under pressure, risk-sensitive currencies have been underpinned against the US Dollar. The US Dollar Index (DXY), which gauges the Greenback’s value against six rival currencies, is slightly above the weekly low of around 103.80.

The FOMC minutes will provide more guidance on interest rates and an in-depth explanation behind the Fed maintaining interest rates unchanged in the range of 5.25%-5.50% for the fourth time in a row.

This week, investors will focus on the preliminary S&P Global Manufacturing and Services PMI for February, which will be published on Thursday. The Manufacturing PMI is forecasted to decrease to 50.5 from 50.7 in January. The Services PMI that represents the service sector, which accounts for two-thirds of the United States economy, is expected to release at 52.0, lower than the prior reading of 52.5.

Silver technical analysis

Silver price rebounds after testing the breakout region of the Descending Triangle chart pattern formed on a daily timeframe near $23.00. The near-term outlook for the white metal has turned bullish as it has comfortably settled above the 20 and 50-day Exponential Moving Averages (EMAs), which trade around $22.80 and $23.00, respectively.

The 14-period Relative Strength Index (RSI) approaches the 60.00 hurdle. A decisive break above the same would trigger a bullish momentum.

Silver daily chart