Silver Price Forecast: XAG/USD struggles around 20-day EMA as Fed to hold rates steady for longer

Silver price (XAG/USD) trades flat at around $73.70 during the European trading session on Friday. The white metal consolidates as investors await clarity on the United States (US) interest rate outlook, for which investors will focus on speeches from Federal Reserve (Fed) officials who are allowed to speak on the monetary policy, following the completion of the blackout period after the policy announcement on Wednesday.

In the policy meeting, the Fed decided to leave interest rates unchanged in the range of 3.50%-3.75%, as expected. Fed Chair Jerome Powell stated in the press conference that four members of the rate-setting committee dissented from the hold decision, of which three called for a move away from the easing bias.

Currently, the CME FedWatch tool shows that the Fed will hold interest rates steady at their current levels by the year-end.

Theoretically, the Fed maintaining the status quo for longer limits the upside in non-yielding assets, such as Silver.

Meanwhile, de-anchored global inflation expectations due to higher energy prices in the wake of Middle East conflicts, a scenario that discourages central banks from easing monetary conditions, are likely to keep the Silver price under pressure.

In the European trade, the WTI Oil price trades 0.5% higher above $103 due to the prolonged closure of the Strait of Hormuz, a vital passage to almost 20% of global energy supply.

Silver technical analysis

XAG/USD trades almost flat at around $73.70 as of writing, The near-term bias is bearish as it holds below the 20-period Exponential Moving Average (EMA) at $75.38. The downside break under this dynamic barrier keeps the metal under corrective pressure, while the Relative Strength Index (RSI) at 44.48 leans slightly negative but not oversold, suggesting selling pressure persists without being extreme.

On the topside, immediate resistance is located at the 20-period EMA around $75.38, and a sustained close above this level would be needed to ease the current bearish tone and open the door to a more constructive recovery towards $80.00. On the downside, the metal could slide towards the April 7 low of $68.28 if it slides below the April 29 low of $70.86.

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