Silver price (XAG/USD) finds a temporary cushion near $31.30 in Tuesday’s North American session after declining sharply earlier in the day. The white metal gauges little buying interest as the US Dollar (USD) drops ahead of Federal Reserve (Fed) Chair Jerome Powell’s testimony before Congress.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, faces slight pressure and drops to near 108.20.

Market participants will pay close attention to the Fed Powell’s commentary on the interest rate outlook. In January, Powell said in the press conference after interest rates remained steady that monetary policy adjustments won’t be appropriate unless officials see “real progress in inflation or at least some weakness in the labor market”.  

By that time, the major catalyst for the Fed to assess the monetary policy stance had been the United States (US) Nonfarm Payrolls (NFP) data for January, which showed that the Unemployment Rate decelerated to 4% and employment numbers missed estimates due to extreme weather events.

However, the overall outlook of the Silver price remains firm due to heightened fears of a global trade war. On Monday, US President Donald Trump signed executive orders to impose 25% tariffs on imports of steel and aluminum, without exemptions and exceptions, and guided that there will be reciprocal tariffs in the coming days. Historically, the appeal of precious metals, such as Silver, increases in an uncertain global environment.

Silver technical analysis

Silver price continues to face pressure near the immediate resistance of $32.50, which is plotted from the December 9 high. The outlook of the white metal remains bullish as it holds above the 50-day Exponential Moving Average (EMA), which trades around $30.85.

The 14-day Relative Strength Index (RSI) falls back inside the 40.00-60.00 range, suggesting that the momentum is not bullish for now. However, the upside bias is intact.

Looking down, the upward-sloping trendline from the August 8 low of $26.45 will be the key support for the Silver price around $29.50. While, the October 31 high of $33.90 will be the key barrier.

Silver daily chart

(Click on image to enlarge)

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