Why is silver price down today? Upcoming US monetary policy decisions drive pullback

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Silver drops 1.05% today to $58.09

Highlights

Weaker-than-expected US inflation lowered expectations for immediate Fed rate hikes, pressuring the US dollar and supporting silver prices.
Rising oil prices and ongoing geopolitical risks have increased market uncertainty, reducing near-term interest in non-yield assets like silver.
Silver faces sustained selling pressure below key moving averages, with a 73% probability of trading lower in the $57.26–$58.92 range next session.

Diverging policy outlooks and risk sentiment drive mixed silver demand

Softer-than-expected US inflation data, reported by Fxstreet, reduced near-term expectations for a Federal Reserve interest rate hike and contributed to US dollar weakness, a shift that typically supports dollar-denominated commodities such as silver. At the same time, recent oil price gains lifted market anticipation for a possible rate increase, weighing on demand for non-yielding assets like silver, according to Fxstreet. Broader market uncertainty from geopolitical tensions in West Asia and focus on upcoming US monetary policy decisions further dampened sentiment in the precious metals complex, as noted by Cnbctv18.

Oversold momentum persists as technical resistance limits recovery

On the technical front, XAG sits below the 20-period and 50-period moving averages on the hourly chart at $58.53 and $58.23, respectively, and remains well under the 200-period moving average, which stands at $76.61 on the daily timeframe. The Ichimoku Kijun line marks immediate resistance at $58.7. Among oscillators, the Moving Average Convergence Divergence (MACD) and the Awesome Oscillator both show Sell signals, while the Average Directional Index (ADX) is Neutral. The Relative Strength Index (RSI) is at 45.09 with a Sell reading, and the Commodity Channel Index (CCI), Stochastic RSI, and Bull/Bear Power are all in Oversold territory, hinting at some intraday exhaustion among sellers.

Downside favored as high volatility defines near-term range

For the next trading day, XAG is forecast to fluctuate in a range between $57.26 and $58.92, reflecting typical volatility at current levels. Probabilities favor further downside, with a 73% likelihood for additional price declines and a 27% chance of a near-term bounce. The base case is for prices to consolidate within this corridor; a move above $58.7 would be required to trigger a recovery scenario, while a break below $57.26 would set the stage for further losses.

Anton Kharitonov, expert at Traders Union, sees silver’s technical and fundamental backdrop as notably fragile. He notes persistent bearish pressure with prices trading below key moving averages and sentiment undermined by macroeconomic cross-currents. Caution prevails given the looming threat of further downside and few bullish signals from either the news flow or indicators. "Unless silver reclaims resistance at $58.7, I remain defensive with a bearish bias."

Earlier, analysts noted that silver faced a cautious outlook amid ongoing geopolitical and macroeconomic uncertainties, which contributed to a mixed technical and sentiment-driven picture. The current setup deepens this caution, with downside risks now dominant, making a break below $57.26 the key signal for further weakness.

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.