04.12.2024
Sholanke Dele
Analyst at Traders Union
04.12.2024

Silver price prediction: metal dips 1% amid Fed rate cut expectations

Silver price prediction: metal dips 1% amid Fed rate cut expectations Silver prices face resistance despite Fed rate cut anticipation and geopolitical tensions

​Silver prices are facing headwinds despite the market anticipating a potential interest rate cut by the US Federal Reserve and global geopolitical tensions.

A 75% probability is being priced in for a 25 basis point cut at the Fed’s December meeting, with investors looking to upcoming US jobs data and comments from Fed Chair Jerome Powell for further direction on monetary policy. As a result, precious metals like silver have seen some safe-haven demand, with geopolitical events in South Korea and the Middle East contributing to the uptick in interest.

However, on the charts, silver is showing signs of weakness. The 4-hour chart reveals a bearish trend, with the price declining by 1% in today’s European session, dropping from the Fibonacci 0.786% level at $31.12 to the 0.618% level at $30.80. This follows a more positive move earlier in the week when silver posted a 2% gain after breaking above the 200 EMA on the 1-hour chart.

RSI and China stimulus supports Silver outlook

Despite the decline, the RSI remains above 50, indicating that the market is not in full bearish momentum yet, though the downward pressure remains evident. The price has also been facing resistance from a bearish trendline and the 200 EMA, adding to the technical challenge for silver bulls.

With the US Fed likely to cut interest rates, the impact of lower rates could spur renewed interest in precious metals, especially if the global economic outlook continues to reflect uncertainty. Furthermore, speculation that China may announce additional stimulus measures this month adds to the positive outlook for silver’s demand, particularly as the world’s largest consumer of metals is expected to ramp up its industrial activity.

As silver remains caught between a bearish technical setup and supportive macro factors, investors will be looking for clarity from upcoming US economic data to assess the next move in silver prices.

Silver price posts a 3% gain amid resistance indicators. The bullish momentum for silver is driven by shifting market expectations regarding U.S. interest rates.

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