US Federal Reserve rate decision sends Silver down

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Silver drops 3.38% to $52.39 today

Highlights

The US Federal Reserve held interest rates steady, with two officials favoring an additional hike, signaling policy uncertainty.
Sustained elevated rates continue to increase the opportunity cost for non-yielding assets such as silver, leading to market caution.
Silver trades below key moving averages with bearish momentum indicators, expected to move between $51.55 and $53.23 in the next 2 to 3 days.

Policy uncertainty fuels market caution as Fed holds rates

The US Federal Reserve decided to maintain interest rates unchanged, with dissent from two officials who favored an additional rate hike, according to Business Standard. Elevated and potentially rising rates sustain the opportunity cost of holding non-yield-generating assets such as silver and contribute to an environment of market caution. Policy uncertainty is thus adding to downward pressure on demand for XAG in the current session.

Bearish momentum and oversold signals as technical barriers hold

On the h4 chart, XAG is trading below the MA-20 at $53.75 and the MA-50 at $53.84, and remains under the long-term MA-200 at $67.16. The Ichimoku Kijun at $53.5 sets immediate resistance, while momentum signals are bearish with both MACD and ADX pointing to selling conditions. The RSI stands at 35.49, indicating a sell bias, and both Stoch RSI and CCI are oversold, suggesting the market is stretched to the downside. Bull/Bear Power underscores seller dominance intraday, and the Awesome Oscillator further confirms ongoing negative momentum.

Range-bound outlook favors downside risk amid weak upward odds

Over the next 2 to 3 trading days, XAG is expected to fluctuate within a range of $51.55 to $53.23, a volatility band relative to current levels. The probability for an upward move is estimated at 23%, while a downward move is more likely at 77%. Sideways movement within the stated range is the prevailing scenario. If XAG breaks above immediate resistance at $53.5, a bullish case could emerge, while a decline below $51.55 would signal further losses.

Anton Kharitonov, expert at Traders Union, sees Silver under sustained technical and fundamental pressure. He notes the Fed's rate stance and ongoing bearish momentum indicators as key negatives. The analyst believes buyers remain sidelined unless resistance at $53.5 is reclaimed. "Given persistent selling signals and policy uncertainty, I remain defensive on XAG until clear reversal signs emerge."

Previously it was reported that silver continued to face downside risk amid subdued momentum and unfavorable macroeconomic conditions. The current analysis reinforces this bearish outlook with updated technicals and elevated probability of further declines, highlighting the importance of monitoring the $51.55 support level for signs of additional downside movement.

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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