Silver Price Forecast: XAG/USD consolidates below 100-Day SMA as momentum fades

Silver (XAG/USD) remains stagnant on Monday, oscillating between a weaker US Dollar (USD) and persistent hawkish Federal Reserve (Fed) expectations, which have kept the metal directionless after a 4.11% drop on Friday due to Chair Kevin Warsh's hawkish remarks at the Jackson Hole event. As of now, XAG/USD sits at $66.25, slipping 0.23% for the day.

Warsh's inflation-centric statements at Jackson Hole initially propelled the USD to multi-week highs, with the Dollar Index (DXY) soaring to 99.72 as traders renewed hopes for a September rate increase. The CME FedWatch Tool now projects a 65% chance of a 25-basis-point hike at the upcoming meeting. The USD has since softened somewhat over the past day, trading near 99.44 as of writing.

From a technical standpoint, the recent decline has driven XAG/USD below the 100-day Simple Moving Average (SMA), hinting at a bearish outlook, although the metal still trades above the 50-day SMA at $61 and a Fibonacci support zone between $60.97 (61.8% retracement) and $64.79 (38.2% level). The daily Relative Strength Index (RSI) at 53 indicates neutral momentum, having slipped from above 60, signaling fading bullish sentiment, while the Moving Average Convergence Divergence (MACD) sits close to the zero line with a flat profile, suggesting a consolidation phase before the next trend shift.

On the upside, the first resistance level lies at the 23.6% Fibonacci retracement at $67.16, followed by the 100-day SMA near $68, where a successful breakout could pave the way to the $70.99 Fibonacci structural anchor and eventually the 200-day SMA at $72. Conversely, support is found at the 38.2% retracement at $64.79, with deeper buying interest at the 50% level at $62.88 and the 61.8% retracement at $60.97, with the 50-day SMA at $61 adding to this support zone on any significant pullback.