Silver Price Forecast: Sellers retain control in descending channel ahead of Fed

• With the Fed’s monetary policy announcement approaching, Silver continues to face selling pressure.
• XAG/USD remains confined to a descending channel on the 4-hour chart.
• Although MACD has turned positive, suggesting stabilisation, an RSI reading below 50 points to subdued buying momentum.

With the Federal Reserve’s (Fed) monetary policy announcement due at 18:00 GMT, traders are reluctant to take aggressive positions on Wednesday, leaving Silver (XAG/USD) consolidating modest losses. A slight easing in the US Dollar (USD) is cushioning the decline. The white metal is trading around $5410 at the time of writing, 0.57% lower on the day, though still above Tuesday’s fresh year-to-date low of $52.67.

After touching a fresh two-week high of 102.49 earlier in the session, the US Dollar Index (DXY) is broadly steady around 102.33. The index measures the Greenback against a basket of six major currencies.

Interest rates are widely expected to remain at 3.75%-4.00%, following policymakers’ 25-basis-point increase in September. The metals’ next move therefore depends more on the Fed’s policy guidance than on the decision itself. Risks to inflation remain skewed upwards, partly reflecting higher energy costs associated with Middle East tensions, while policymakers continue to pursue a return to the 2% inflation target.

Any indication of additional rate increases could consequently bolster the US Dollar and maintain pressure on Silver. As the metal pays no yield, higher rates raise the opportunity cost of holding it; Dollar strength also increases its cost for overseas buyers. Conversely, a less hawkish message could weaken the Greenback and allow Silver to regain ground.

Silver’s Technical Outlook Remains Bearish

Despite a modest recovery in MACD, the near-term bias for XAG/USD remains bearish. On the 4-hour chart, the pair continues to trade inside a descending channel and below its 50-period, 100-period and 200-period Simple Moving Averages (SMAs).

At around 44, the Relative Strength Index (RSI) remains beneath its midline, signalling limited buying pressure. Although Moving Average Convergence Divergence (MACD) has moved into positive territory, the indicators suggest consolidation against a bearish backdrop rather than a lasting reversal.

The first upside hurdle is the horizontal resistance near $55.00, ahead of the 50-period SMA at $55.58. Only a decisive move above these levels would relieve immediate downward pressure and bring the 100-period SMA at $57.41 into view. Further out, the descending channel’s upper boundary near $60 and the 200-period SMA around $60.34 provide a more distant ceiling.

Near the channel’s lower boundary, the $52.00-$52.50 region offers initial support. Should this zone give way, further declines towards horizontal support at $50.00 could follow.

(The technical analysis of this story was written with the help of an AI tool. Know more.)