Silver trades down after persistent US rate hike expectations pressure demand

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Silver drops 1.25% to $53.79 today

Highlights

Rising crude oil prices have increased concerns about persistent inflation, leading market expectations for prolonged or higher U.S. interest rates.
Sustained monetary policy tightening and higher opportunity costs have reduced investor demand for non-yielding assets such as silver.
Silver trades below key moving averages with strong bearish technical signals, and is projected to range between $52.05 to $55.53 with limited rebound probability.

Inflation-driven rate expectations weigh on non-yielding assets

Rising crude oil prices have heightened concerns about persistent inflation, which in turn has reinforced expectations that U.S. interest rates may remain restrictive or potentially increase further, according to Tradingpedia. This dynamic increases the opportunity cost of holding non-yielding assets such as Silver, prompting additional pressure on its price. Diminished investor appetite for precious metals has emerged as monetary policy tightening signals persist.

Bearish momentum persists as price breaches multiple moving averages

On the H4 chart, XAG has fallen below the MA-20 at $53.9 and the MA-50 at $54.24, while on the daily timeframe, price remains well below the MA-200 at $67.29. The Ichimoku Kijun at $53.61 offers immediate support. MACD displays a strong sell signal and the ADX confirms selling strength; however, short-term oscillators are mixed, with RSI at 47.95 (Sell), Stoch RSI showing Buy, and CCI at Neutral. Bull/Bear Power indicates active buyer presence intraday, while the Awesome Oscillator is neutral and does not confirm the prevailing trend.

Downward bias dominates amid narrow volatility and consolidation risk

Over the next few trading days, XAG is forecast to fluctuate within the $52.05–$55.53 volatility band relative to current levels. There is a very high probability of continued downward movement and a very low probability of a meaningful rebound. The baseline scenario anticipates sideways consolidation within the projected range; a break above resistance would be needed for a bullish outcome, while a decisive move below immediate support would open up further downside risk.

Viktoras Karapetjanc, expert at Traders Union, sees macroeconomic headwinds weighing on Silver as expectations for prolonged restrictive U.S. interest rates remain elevated. He notes that bearish sentiment is being reinforced by inflation concerns and monetary tightening signals, causing investors to shy away from non-yielding assets. Technicals confirm pressure, but immediate support may slow further declines. Karapetjanc believes short-term consolidation is likely, with bulls needing a clear break above resistance to shift the bias. "If Silver holds above key support, a recovery attempt may unfold, but the path of least resistance still points lower for now."

Previously it was reported that silver prices in Bangladesh remained steady even as gold rates experienced upward revisions following volatility in the local precious metals market. The present technical landscape introduces increased downside risk, making $52.05 a key support level for traders to monitor closely over the coming sessions.

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

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