Market news
30.04.2024, 08:21

Silver Price Forecast: XAG/USD falls to three-week low near $26.70 with eyes on Fed policy meet

  • Silver price tumbles to $26.70 as US yields rise ahead of Fed policy.
  • The Fed is expected to keep interest rates steady with hawkish guidance.
  • Investors should be prepared for high volatility this week, as the US NFP will follow the Fed’s policy.

Silver price (XAG/USD) drops to near three-week low of $26.70 in Tuesday’s European session. The white metal faces a sharp sell-off after breaking below the crucial support of $27.00. The asset faces pressure as the US Treasury yields rise amid caution ahead of the Federal Reserve’s (Fed) monetary policy announcement on Wednesday.

10-year US Treasury yields rise to 4.63% on expectations that the Fed will maintain a hawkish narrative. Higher yields on interest-bearing assets increase the opportunity cost of holding investments in non-yielding assets, such as Silver.

The CME FedWatch tool shows that interest rates will remain unchanged in the range of 5.25%-5.50%. Therefore, investors will keenly focus on the Fed’s guidance on interest rates. The Fed is expected to support keeping interest rates at restrictive levels for a longer period until it gets evidence that inflation will come down to the 2% target.

Investors will also watch whether the Fed remains committed to its three rate-cut projections this year. Doubts over the Fed’s three rate-cut projections that were shown in March’s dot plot have emerged due to United States inflation remaining stubbornly higher in the first quarter.

The US Dollar Index (DXY), which tracks the US Dollar’s value against six major currencies, bounces back to 105.90. The US dollar's appeal improves ahead of a data-packed week. This week, investors will focus on the ISM Manufacturing PMI and the Nonfarm Payrolls (NFP) report for April, which will be published on Wednesday and Friday, respectively.

Silver technical analysis

Silver price declines toward the horizontal support plotted from 14 April 2023 high around $26.09 on a daily timeframe. The above-mentioned support was earlier a major resistance for the Silver price bulls. The uncertainty over Silver’s near-term outlook deepens as it has slipped below the 20-period Exponential Moving Average (EMA), which trades around $27.20.

The 14-period Relative Strength Index (RSI) slips into the 40.00-60.00, suggesting that the bullish momentum has faded. However, the long-term outlook is still stable.

Silver daily chart

XAG/USD

Overview
Today last price 26.7
Today Daily Change -0.44
Today Daily Change % -1.62
Today daily open 27.14
 
Trends
Daily SMA20 27.68
Daily SMA50 25.49
Daily SMA100 24.32
Daily SMA200 23.79
 
Levels
Previous Daily High 27.44
Previous Daily Low 26.97
Previous Weekly High 28.69
Previous Weekly Low 26.67
Previous Monthly High 25.77
Previous Monthly Low 22.51
Daily Fibonacci 38.2% 27.15
Daily Fibonacci 61.8% 27.26
Daily Pivot Point S1 26.93
Daily Pivot Point S2 26.72
Daily Pivot Point S3 26.46
Daily Pivot Point R1 27.4
Daily Pivot Point R2 27.65
Daily Pivot Point R3 27.86

 

 

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