Silver price forecast: 6% drop pushes silver below critical 100-day EMA
Silver price slides 6% from recent high, faces crucial support at $30.20 amid Fed expectations
Silver price is under pressure after shedding over 6% from last week’s five-week high of $32.30. The metal’s decline has pushed it below the critical technical level of the 100-day
Exponential Moving Average (EMA). Despite attempts at a slight recovery, resistance at the 0.618 Fibonacci retracement level has limited upward momentum, keeping prices in a downtrend.
Silver price dynamics (September-December 2024). Source: TradingView.
Currently, silver is moving closer to key support at $30.20, with further downside risk towards the $29.65 level—a price floor that has held firm since September. Technical indicators add to the bearish outlook; the Relative Strength Index (RSI) remains above oversold territory, suggesting room for further declines before buyers might step in.
Silver faces pressure from Fed expectations and dollar strength
Macroeconomic forces such as the Federal Reserve’s policy path for 2025 are compounding on silver’s downward trajectory as markets await its December 17-18 meeting. While a 25 basis point rate cut is widely anticipated given the CME FedWatch Tool data showing a 97% probability, Chair Jerome Powell’s commentary on Wednesday will be pivotal. Recent economic data supports a measured pace of easing. Core inflation remains elevated at 3.3% annually, far above the Fed’s 2% target, while wholesale prices rose 0.4% in November. Although jobless claims hint at slight labor market softening, resilient economic growth and persistent inflationary pressures suggest limited urgency for aggressive rate cuts.
These conditions have strengthened the U.S. dollar and pushed Treasury yields higher, both of which weigh heavily on non-yielding assets like silver due to the increasing appeal of interest-bearing alternatives.
Looking ahead, silver’s ability to hold the $30.20 and $29.65 support levels will be key to determining its near-term direction. A break below these levels could change silver long-term sentiment to bearish, while any shift in Fed rhetoric or weakening in the dollar may provide relief for the metal.
Silver dropped 5% from its five-week high of $32.30 and tested key support levels. Stronger-than-expected US PPI data and shifting dynamics in China leave silver’s short-term outlook uncertain.
