Silver Holds $64.80 as Fed Rate Hike Expectations Firm
Silver trades at $64.80, up 1.8%, ahead of the Federal Reserve decision.
Silver (XAG/USD) is up 1.8% to $64.80 in European trading. The metal trades ahead of the Federal Reserve's monetary policy announcement at 18:00 GMT. Traders expect the Fed to hike interest rates by 25 basis points to the 3.75%-4.00% range.
This expectation follows the sticky August US Consumer Price Index report. The CME FedWatch tool shows a 79% probability of at least two rate hikes by year-end. Higher yields reduce the appeal of non-yielding assets like silver.
Fed decision drives market focus
Market reaction will hinge on the policy statement and Fed Chair Kevin Warsh's press conference. Warsh is unlikely to provide forward guidance on future rates. He stated in his first meeting that such guidance is inappropriate under current circumstances.
Treasury yields pressure silver prices
The 10-year US Treasury yield is near 5%. This is close to the 19-year high of 5.04% posted on Tuesday. Rising yields diminish the appeal of non-yielding assets such as silver.
Technical levels define near-term trend
Silver trades below the 20-day Exponential Moving Average at $65.12. The Relative Strength Index is around 49, indicating fading momentum. A daily close above $65.12 is needed to ease downside pressure.
Support lies near the recent low of $62. A break below this level could expose prices to losses toward the lower $60 area. The source, GN auto markets/commodities: silver prices, notes the metal remains under technical pressure.
