Silver Stalls Below $64.00 as Fed Hike Expectations Firm
Silver failed to hold gains and traded below the $64.00 level during the Asian session. Market participants remain on the sidelines ahead of the Federal Reserve policy decision.
Silver rejected the $64.00 resistance level during Asian trading hours. The metal could not sustain its previous day's modest gains. Traders are currently avoiding large directional bets. They are waiting for the Federal Reserve to announce its policy decision. The market has fully priced in a 25 basis point rate hike. This expectation supports the US Dollar near a two-week high. Rising US bond yields further pressure the non-yielding asset.
Geopolitical tensions in the Middle East continue to boost safe-haven demand for the Dollar. This strength caps upside potential for silver. The technical setup remains bearish in the near term. The price sits below the 200-day Exponential Moving Average. This moving average is located at approximately $64.13. A break below this level would confirm the downward trend.
Technical Indicators Favor Downside
The Moving Average Convergence Divergence shows negative readings. The Relative Strength Index stands at approximately 46. These signals indicate that momentum favors sellers. The path of least resistance is currently downward. Silver trades above the 50.0 percent Fibonacci retracement level. This support zone is located at $62.94. A deeper cushion exists at the 61.8 percent retracement level. That level sits at $61.06.
Reclaiming the 200-day EMA is required to shift the bias to bullish. Traders watch the 38.2 percent Fibonacci level at $64.82 for a potential rebound. A stronger recovery would face a higher barrier at $67.15. This level corresponds to the 23.6 percent retracement. Without a decisive move above $64.13, the bearish structure remains intact.
Dollar Strength Caps Silver Gains
Oil-driven inflation risks keep US bond yields elevated. Higher yields make the Dollar more attractive to investors. The Dollar trades near a two-week top. This directly suppresses the price of silver. Silver is priced in Dollars. A stronger Dollar makes the metal more expensive for holders of other currencies. This dynamic limits buying pressure in international markets.
Geopolitical risks add to the safe-haven appeal of the Dollar. Middle East tensions continue to influence market sentiment. Investors prefer the liquidity and perceived safety of the Dollar. This flow of capital away from precious metals restricts price appreciation. The interplay between yields and currency strength remains the primary headwind for silver.
Support Levels Define Downside Risk
Initial support is found at $62.94. This level represents the 50.0 percent Fibonacci retracement of the recent upswing. If this support fails, the next major cushion is at $61.06. A clear break below $61.06 would reinforce the prevailing bearish bias. Such a move would likely trigger further selling pressure. The market awaits the Fed decision to determine the next directional move.
