Federal Reserve policy keeps Silver in tight range

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Silver drops 0.67% to $57.09 today

Highlights

Silver hit a six-month low as a stronger US dollar and expectations of prolonged Fed rate hikes increased selling pressure.
Macroeconomic volatility has intensified movement in silver, with investors reacting to non-yielding asset headwinds.
Technicals indicate strong bearish momentum, with silver likely to trade between $54.56 and $59.62 and downside favored.

Sustained losses intensify on dollar strength and Fed expectations

Silver faced sustained downward pressure, reaching a six-month low during Wednesday’s Asian session, according to FXEmpire, amid increased selling on spot markets. The market response was shaped by a stronger US dollar and persistent expectations that the Federal Reserve will maintain higher interest rates for longer, creating pronounced headwinds for non-yielding assets. Data from FXStreet confirmed a marked decline from prior levels, highlighting the role of macro-driven volatility on silver’s trading environment.

Bearish signals dominate as price trades under cluster of resistance

On the H1 timeframe, XAG trades below its 20-period moving average at $57.29 and its 50-period moving average at $59.65, with the long-term 200-period moving average well above at $76.54. The Ichimoku Kijun level at $58.41 establishes immediate resistance. Momentum remains negative: the Moving Average Convergence Divergence (MACD) signals strong sell, the Average Directional Index (ADX) also indicates a sell, while the Relative Strength Index (RSI) stands at 38.95, signaling weak market strength. The Stochastic RSI is overbought, point to a possible divergence, the Commodity Channel Index (CCI) is neutral, Bull/Bear Power registers sell, and the Awesome Oscillator is neutral, reflecting mixed intraday momentum.

Further declines likely as upside breakout remains unlikely

For the coming 2 to 3 trading days, XAG is projected to fluctuate within a volatility band of $54.56 to $59.62. The likelihood of upside movement is considered very low, while further declines hold a very high probability. Unless silver breaks above the $58.41 threshold, sideways or downward movement remains the baseline scenario, while a breach below $54.56 would confirm additional downside momentum.

Viktoras Karapetjanc, expert at Traders Union, sees persistent pressure on silver driven by macroeconomic headwinds and sentiment shifts. The analyst notes that the strong US dollar and expectations for prolonged higher rates continue to weigh on non-yielding assets like silver. He believes technicals and fundamentals are aligned to limit any meaningful rebound in the near term. 'As long as XAG stays capped below $58.41, downside risks dominate and caution is warranted,' says Karapetjanc.

Earlier, analysts noted that silver faced sustained bearish pressure amid a stronger US dollar and diminishing safe-haven demand, contributing to a weak outlook for the metal. The current price action not only reinforces this bearish scenario but also underscores the importance of monitoring the $54.56 support level for signs of further downside risk.

Source of Data: XAG Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.