Key Moments
- XAG/USD trades near $80.50 in a tight range as markets wait for the Fed policy decision on Wednesday.
- Markets expect the Fed to keep rates unchanged at 3.50%-3.75%.
- Meanwhile, tensions involving the US, Israel, and Iran support Silver’s safe-haven demand.
Fed Outlook Keeps Silver Cautious
Silver (XAG/USD) trades cautiously near $80.50 during Tuesday’s European session. Price action remains limited as investors wait for the Federal Reserve’s policy decision on Wednesday.
Markets widely expect the Fed to keep the federal funds rate within the 3.50%-3.75% range. Policymakers maintain a cautious stance because inflation remains stubborn.
Higher oil prices linked to Middle East tensions also reinforce inflation concerns. As a result, investors expect policymakers to keep borrowing costs elevated.
According to the CME FedWatch tool, markets expect rates to remain unchanged for the next four meetings. Therefore, higher borrowing costs may weigh on non-yielding assets such as Silver.
Meanwhile, investors will focus on the Fed’s updated dot plot. They will also watch Chairman Jerome Powell’s press conference for guidance on future policy.
Geopolitical Risks Support Silver
At the same time, geopolitical tensions continue to support Silver prices. Ongoing friction among the US, Israel, and Iran keeps investors cautious.
As a result, demand for safe-haven assets remains firm. Silver often benefits during periods of global uncertainty.
Reuters reported that the conflict may persist. Iran’s new Supreme Leader, Mojtaba Khamenei, reportedly rejected peace proposals during a foreign policy meeting.
Therefore, prospects for a quick de-escalation remain limited. This backdrop continues to support safe-haven demand.
Technical Picture: Descending Triangle Limits Upside
On the four-hour chart, XAG/USD trades within a Descending Triangle near $80.50. This pattern signals contracting volatility.
The descending trendline from the March 1 peak at $96.62 acts as resistance near $84.00. Meanwhile, horizontal support from the March 3 low near $78.00 holds the downside.
Short-term momentum remains negative. Price trades below the 20-period Exponential Moving Average (EMA) near $81.80.
In addition, a series of lower highs from above $96.00 confirms a bearish structure. The 14-period Relative Strength Index (RSI) stays in the 40s, which signals weak momentum.
However, the RSI does not show oversold conditions yet. Therefore, sellers remain in control.
| Level | Type | Approximate Price |
|---|---|---|
| $81.80 | Initial resistance – 20-period EMA | $81.80 |
| $84.00 | Key resistance – descending trendline | $84.00 |
| $86.00 | Next upside target if $84.00 breaks | $86.00 |
| $79.00 | Immediate support | $79.00 |
| $78.50 | Recent low / next support | $78.50 |
| ~$78.00 | Horizontal base of Descending Triangle | ~$78.00 |
On the upside, the first resistance appears near the 20-period EMA at $81.80. After that, the descending trendline near $84.00 becomes the key barrier.
If buyers break above $84.00, the bearish outlook could weaken. In that case, price may move toward the $86.00 region.
On the downside, support emerges near $79.00. Below that level, the recent low near $78.50 becomes the next target.
If selling pressure slows, prices could stabilize near that zone. An oversold RSI could also encourage a short-term bounce.
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