Silver holds ground at daily support, eyes on significant correction

• Silver is holding up despite the strong bid in the US dollar on Wednesday.
• Bulls holding at daily support, but need a daily bullish close. 

XAG/USD is trading at $25.1030 having moved higher on the day from a low of $24.9845 and a high of $25.3604. 

Precious metals gained on Wednesday following Federal Reserve Chair Jerome Powell's repeated calls to keep low-interest rates pinned near zero. 

Both Treasury Secretary Janet Yellen and Fed chair Jerome Powell appeared before a Senate committee again on Wednesday.

Despite the Biden Administration's US$1.9 trillion economic-relief package, which is considered bullish for precious as an inflation hedge, Powell remains adamant that inflation will be transitory. 

Powell told lawmakers the prior day that he expected some inflation but that would be "neither particularly large nor persistent."

A spike in inflation absent of Fed intervention is a bullish backdrop for precious metals. The US central bank has pledged to keep interest rates anchored near zero in its policy meeting last week.

However, given the fundamental backdrop in rising US yields, a faster vaccine rollout than any other developed market and a strong economic recovery, especially to that of the EU, the dollar's strength could be here to stay for longer. 

• EUR/USD bears seeking a second daily close below 200D-SMA

Silver technical analysis

XAG/USD was testing the daily demand territory earlier this week ahead of the break of the psychological $25.000 area.

In prior analysis, it was explained that ... 

... an upside correction could be on the cards at this juncture.

Prior support that would be expected to act as resistance on a restest could be an optimal bearish entry point. 

On the daily chart, the daily support higher up at around $25.8000 has a confluence with a 50% mean reversion of the daily bearish impulse. 

However, the first 4-hour structure falls in at $25.4135.

Live market, 4-hour chart

Live market, daily chart

The bulls are seeking both a close above the trendline on the 4-hour time frame and a bullish close on the daily chart to open prospects of a significant test of the prior support structures.