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Silver slides as US dollar rebounds, eyes Fed decision

Silver was around $58.3 after trading above $60 earlier, and a surprise Fed hike is seen as the most bearish catalyst, potentially pressuring the $55 support level.

Reported · Written up by our desk · Major Pairs

Silver prices eased after giving back some earlier gains as the US dollar rebounded, following the US and Iran pausing attacks over the weekend, according to FXStreet.

At the time of writing, XAG/USD traded around $58.34, up 0.37% on the day, after briefly climbing above $60 during Asian hours. The metal has been confined mostly to the $55.00 to $62.00 range in recent weeks, with hawkish Federal Reserve expectations limiting upside.

FXStreet said expectations are for the Fed to keep rates unchanged at 3.50% to 3.75%, though a surprise hike is not ruled out. Traders, via the CME FedWatch Tool, were pricing in about a 35% chance of an immediate increase, and FXStreet described a surprise hike as the most bearish outcome for silver.

The outlet added that higher rates would likely strengthen the dollar and push up Treasury yields, raising the opportunity cost of holding non-yielding assets. FXStreet also noted that a hawkish hold could threaten the $55 support level, while a less hawkish tone could improve the odds of a recovery back above $62, though it was not the base case.

Latest closeSilver $58.49 ▲1.2%

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