- Silver price declines to near $30.20 amid firm bond yields ahead of Fed’s policy meeting on Wednesday.
- US bond yields remain firm on expectations that the Fed will signal fewer interest rate cuts for 2025.
- The US Dollar surrenders gains despite better-than-anticipated growth in the US Retail Sales data for November.
Silver price (XAG/USD) refreshes a two-week low near $30.20 in the North American session on Tuesday. The white metal faces selling pressure as bond yields extend its winning streak for the seventh trading day and climbs above 4.40%.
Higher yields on interest-bearing weigh on non-yielding assets, such as Silver, given that they result in elevated opportunity costs for them.
US Treasury yields have performed strongly ahead of the Federal Reserve’s (Fed) policy decision on Wednesday. The Fed is expected to cut interest rates by 25 basis points (bps) to 4.25%-4.50% but will choose “hawkish” guidance for the interest rate path for 2025.
Analysts at Macquarie said in a note that the “recent slowdown in the pace of US disinflation, a lower Unemployment Rate than what the Fed projected in September, and exuberance in US financial markets are contributing to this more hawkish stance.”
Meanwhile, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, gives up intraday gains and turns flat slightly below 107.00. The US Dollar (USD) surrenders gains even though the United States (US) monthly Retail Sales data for November beats estimates. The Retail Sales data, a key measure of consumer spending, rose by 0.7%, faster than estimates and the former release of 0.5%.
Silver technical analysis
Silver price posts a fresh two-week low near $30.20 on Tuesday. The white metal weakens after breaking below the 20-day Exponential Moving Average (EMA), which trades around $31.00.
The 14-day Relative Strength Index (RSI) oscillates inside the 40.00-60.00 range, suggesting a sideways trend.
Looking down, the upward-sloping trendline around $29.50, plotted on a daily timeframe from the February 29 low of $22.30, would act as key support for the Silver price. On the upside, the horizontal resistance plotted from the May 21 high of $32.50 would be the barrier.
Silver daily chart
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD ticks higher after discouraging US Retail Sales
EUR/USD keeps trading around the 1.0500 mark in the American session on Tuesday. A negative shift in risk sentiment revived the haven demand for the US Dollar earlier in the day, while tepid US Retail Sales figures put near-term pressure on the Greenback.
GBP/USD trims intraday gains and trades sub-1.2700
GBP/USD gave up early gains and trades pretty flat on the day. The data from the UK showed that the ILO Unemployment Rate held steady at 4.3% in the three months to October, while the annual wage inflation climbed to 5.2%. Poor US Retail Sales limit US Dollar demand.
Gold under pressure around $2,640
Following Monday's shallow recovery attempt, Gold remains under modest bearish pressure and trades below $2,650 on Tuesday. Growing expectations for a less dovish Fed outlook and elevated US bond yields weigh on XAU/USD ahead of the last FOMC meeting of the year.
BTC extends upside above $107K as Microstratergy and Riot expand Bitcoin holdings
Bitcoin (BTC) price trades in green, trading above $107,000 on Tuesday after reaching a record level of $107,793 the previous day. The recent rally in BTC is supported by corporations like MicroStragerty and Riot Platforms, which added more BTC to their holdings.
Will the Fed cut interest rates again and why is the dot plot important Premium
The Fed is expected to cut interest rates on Wednesday for the third consecutive meeting. Every time the Fed decides on rates, it is a crucial event as it directly affects families and businesses in the United States. Moreover, the Fed’s last meeting of the year will also be important because it will provide the outlook for what it expects to do in 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.