In his keynote speech on Friday, August 23, 2024, at the Federal Reserve's annual economic symposium in Jackson Hole, Wyoming, Federal Reserve Chair Jerome Powell stated, "The time has come for policy to adjust." He emphasized that while the direction of monetary policy is now clear, the timing and pace of interest rate cuts will be determined by incoming economic data, the evolving outlook, and the balance of risks.
Following Powell’s remarks, silver experienced a significant surge, along with other metals, crude oil, and the Dow, forming a bullish engulfing candle on the charts.
The price action on Friday led to a decisive close above a three-day consolidation, which included a red candle on Thursday. On a weekly basis, silver closed within the nine-week consolidation zone that has persisted since its all-time high on May 20th. This move successfully breached the strong resistance at the lower boundary of this zone, setting the stage for silver to potentially test the upper boundary and eventually challenge its all-time high.
Lets look at the weekly and daily charts of Silver below to comprehend the price action.
Silver Weekly Chart - Green candle for the last week that closed inside the 9 week consolidation zone
Silver Daily Chart - Bullish Engulfing Candle on Friday that closed above a 3 day consolidation
The price action following the impending rate cut has been broad based across commodities, particularly metals, and the financial markets. This raises the likelihood of a further price advance in the coming week.
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