Silver Price Analysis: XAG/USD threatens the 200-day SMA ahead of eventful week

The XAG/USD gained ground rising towards the 200-day SMA seeing more than 2% daily gains
The 20-day SMA is about to cross below the 200-day SMA; further downside may be on the horizon.
Rising US yields may limit the silver´s upside.

The XAG/USD rose near the 200-day Simple Moving Average (SMA) towards the $23.20 area, mainly driven by a softer USD. Investors await Thursday’s annual Jackson Hole Symposium, which may cause volatility in bond markets and the Silver price dynamics. As for now, US yields are rising, limiting further Silver´s gains.

On Thursday, Jerome Powell from the Federal Reserve (Fed) will deliver a speech at the annual Jackson Hole Symposium, which will likely ramp up volatility in the USD and the US bond market price dynamics. As for now, the US economy is holding firm and inflation is seeing a mixed picture, so clues regarding forward guidance will set the pace for the US yield dynamics and affect the non-yielding Silver.

According to the CME FedWatch tool, markets are confident that the Fed won’t hike in September, while the odds of a 25 basis point (bps) increase rise near 40% in November. However, those bets will likely change after Chair Powell’s speech on Thursday.

XAG/USD Levels to watch

Observing the daily chart, the outlook is neutral to bullish for the short term as the bulls are gaining momentum but still have some work to do. Exhibiting a rising slope below its midline, the Relative Strength Index (RSI) suggests a potential bullish resurgence, while the Moving Average Convergence (MACD) lays out lower red bars. Additionally, the pair is below the 20,100 and 200-day Simple Moving Averages (SMAs), suggesting that the bears are firmly in control of the bigger picture.

Support levels: $23.00, $22.90, $22.50.

Resistance levels: $23.30 (200-day SMA), $23.50, $24.00.