- Summary:
- Silver price has encountered headwinds as the Federal Reserve says it is in no hurry to cut interest rates. What next for XAGUSD?
Silver price was down on Thursday as investors digested the Federal Reserve’s decision to keep interest rates in the 4.25%-4.50% range. The XAGUSD pair was at $33.29, down by 1.5% at press time, recording the second successive day of decline as the US dollar strengthens. However, there remains two key sources of support for silver price, with the geopolitical risk in the Middle East and the rising trade tariff war fears.
While announcing the first interest rate decision of the year, Federal Reserve Chairman Jerome Powell stated that the central bank was in no hurry to lower interest rates. While acknowledging the downward pressure on the US economy, Powell also noted that the trade tariff war was likely to keep inflation up. However, the Fed maintained its forecast two rate cuts for the year.
The hawkish Fed stance brings downward pressure on safe haven assets like gold and silver, but the market will be keen on US economic data to get cues on potential policy shifts in the second quarter of the year. In the intervening period, silver price is supported by the escalating geopolitical risk in the Middle East following Israel’s resumption of military strikes in Gaza.
Silver Price Prediction
Silver Price pivots at $33.63 and resistance at that level favours the sellers to be in control. With that, the metal will likely go lower to find the first support at $33.26. Breaking below that level will signal the strengthening of the downward momentum, and could open the pathway to test the second support at $32.00.
On the other hand, the momentum will shift to the upside if the price breaks above $33.63. That could see the first resistance established at $33.84. An extended control by the buyers will clear that hurdle and invalidate the downside thesis. In addition, it could result in a stronger momentum to test $34.10.
