Silver Bounces From Lows as Fed Caps Further Gains

Key Moments

Fed’s Policy Message Clouds Silver’s Fundamental Outlook

Silver (XAG/USD) is trading about 1.5% higher near $72.35 during the European session on Thursday, recovering after printing a fresh three-week trough at $70.86 on Wednesday.

The broader backdrop for the metal remains uncertain after the Federal Reserve left its policy rate unchanged in a 3.50%-3.75% range on Wednesday, in line with expectations, while underscoring the risk that inflation could move higher.

“We remain attentive to risks on both sides of our mandate,” Fed Chair Jerome Powell said in the press conference, adding, “The energy surge has not yet peaked.” According to the policy update, three members of the rate-setting committee argued for removing the easing bias, as elevated energy prices have unsettled inflation expectations.

Following the Fed decision, market expectations for rate reductions this year have pulled back significantly. Data from the CME FedWatch tool show that the implied probability of a single rate cut this year has dropped to 3.3%, down from 18.4% on Tuesday.

In theory, such a shift diminishes support for non-yielding assets like silver, as a more hawkish policy path typically weighs on metals that do not generate income.

Oil Price Rise Adds Further Headwinds for Silver

Beyond the Fed repricing, the latest advance in oil prices is also dampening sentiment toward silver. Crude has moved higher after comments from United States President Donald Trump that Washington’s naval blockade on Iran will be extended further.

Higher oil prices tend to push up global inflation expectations. That environment can discourage central banks from loosening policy, which in turn can erode the investment appeal of silver.

Technical Picture: Rebound Faces Overhead Resistance

From a technical perspective, XAG/USD is trading near $72.35 at the time of writing. Despite the bounce, the short-term bias remains negative, as the spot price is still trading beneath the 20-day Exponential Moving Average (EMA), currently around $75.43.

The distance between the spot price and the 20-day EMA indicates that rallies may continue to face selling pressure. The Relative Strength Index (RSI) is hovering around 41, remaining in negative territory but above oversold levels, suggesting continued – though not extreme – downside momentum.

On the upside, the first significant resistance is clustered around the 20-day EMA near $75.43. A daily close above that level would be needed to alleviate the current bearish setup and could pave the way for a more durable advance toward the $80 area. Until that threshold is reclaimed, rallies are likely to be met with selling.

On the downside, the ongoing pullback in silver could continue toward the April 7 low at $68.28 if selling pressure resumes.