Can reduced Fed rate hike bets support silver price?

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Silver down 0.99% today to $57.19

Highlights

Reduced expectations for a Federal Reserve rate hike in October have shifted investor focus toward non-yielding assets like silver.
Diminished prospects of tighter monetary policy are a key driver in recent market activity surrounding silver.
Silver trades below major averages with sellers controlling the trend; price expected to range from $56.01 to $58.37 in the next 2 to 3 days.

Demand outlook shifts as Fed rate hike expectations ease

Traders have reduced their expectations for a Federal Reserve rate hike in October, a move documented by both FXStreet and Business Standard. With the prospect of tighter monetary policy receding, non-yielding assets such as silver may experience increased demand as investors adjust their portfolios in response to changing yield outlooks. These shifting rate expectations represent a key influence on recent market sentiment toward the metal.

Mixed momentum and key resistance shape short-term technical landscape

On the technical front, XAG trades below the MA-20 and MA-50 on hourly charts and remains under the MA-200 on the daily timeframe. The Ichimoku Kijun at $57.41 serves as immediate resistance, setting the upper bound for near-term rallies. Momentum indicators are mixed: MACD signals strong short-term bullish momentum, while ADX is neutral, showing no strong trend. Oscillators paint a nuanced picture, as RSI is in buy territory, Stochastic RSI is oversold, and CCI stands neutral. Bull/Bear Power points to intraday buyer dominance, indicating underlying demand remains, yet the broader setup shows conflicting signals across timeframes.

Range-bound direction likely as bearish risks outweigh bullish triggers

In the short term, XAG is expected to fluctuate in a range between $56.01 and $58.37, reflecting typical volatility around its current levels. Downside probability is higher at 67%, while the likelihood for an upside move is 33%. The baseline scenario anticipates sideways consolidation, with a decisive break above $57.41 needed to trigger a more sustained bullish move. Conversely, a loss of support below $56.01 would confirm further bearish pressure.

Anton Kharitonov, expert at Traders Union, sees weak conviction on both sides in the current silver market. He notes that softer rate hike expectations provide some support for sentiment, but technical signals are mixed and bias remains defensive. Until resistance at $57.41 is cleared, the risk of further downside dominates. "Unless XAG convincingly breaks above $57.41 with improved momentum, my tactical outlook stays cautious and range-bound."

Earlier, analysts noted that silver's price action was characterized by mixed technical signals and heightened uncertainty due to shifting interest rate expectations. The latest data reinforces this uncertain backdrop, highlighting immediate resistance at $57.41 as the critical level to watch for any sustained bullish reversal.

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.