Silver (XAG) Forecast: Bearish Risks Rise as Prices Near 200-Day Moving Average

Prices Struggle Under Key Resistance Levels Ahead of Fed Decision

Silver prices remain under pressure on Wednesday, trading near $30.39 as traders await the Federal Reserve’s key policy update. Prices face short-term resistance at $30.98 and $31.29, with major resistance at $32.33.

At 12:56 GMT, XAG/USD is trading $30.37, down $0.16 or -0.54%.

Treasury Yields and Dollar Strength Weigh on Silver

Silver, like gold, continues to face headwinds from rising U.S. Treasury yields and a resilient dollar. The 10-year Treasury yield has climbed to 4.40%, reflecting market sentiment for tighter monetary policy into next year. Higher yields raise the opportunity cost of holding non-yielding assets like silver.

The U.S. dollar index (DXY) remains firm around 107.00, further pressuring silver by making it more expensive for foreign investors. Traders are closely monitoring any dovish or hawkish signals from the Fed, which could determine the dollar’s short-term direction.

Fed Outlook: Focus on Rate Cuts in 2025

Markets widely expect the Federal Reserve to keep interest rates unchanged in today’s decision, with a 95% probability priced in. However, attention will be on the updated dot plot and projections for 2025. Analysts anticipate a more hawkish stance, with two or three rate cuts expected instead of four previously forecasted.

Resilient U.S. economic data, including a 0.7% rise in retail sales for November, supports this cautious outlook. The stronger economy reduces pressure on the Fed to cut rates aggressively, a scenario that could weigh further on silver prices.

Short-Term Outlook: Cautious with Bearish Risks

Silver’s near-term outlook remains under pressure as it struggles to hold above $30.39 and the 50-day moving average at $31.29. If the Fed delivers a hawkish tone, silver could test lower support levels near $29.64, with the 200-day moving average at $29.60 acting as critical long-term support. A decisive break below this level could accelerate selling.

However, any dovish surprise may help silver prices reclaim key resistance at $32.33, opening the door for a bullish move toward higher levels. For now, traders remain cautious, awaiting the Fed’s guidance on its 2025 policy path.

More Information in our Economic Calendar.