Fed rate hike expectations rise and US dollar strengthens, silver drops to over six-month low
The core factor behind the recent decline in silver lies in the notable shift in US interest rate expectations. At the initial stage of the Middle East tensions, the market once expected the Federal Reserve might cut rates within the year to alleviate growth pressure. However, as inflation risks stemming from rising energy prices have continued to ferment and US economic data remains strong, market expectations have seen a marked turnaround.
In addition, the outlook for industrial demand is equally worth noting. Silver enjoys both precious and industrial metal properties, so global manufacturing activity changes will directly impact its long-term demand. While the US economy remains on an expansion path, some major economies still show weak growth momentum, which also limits the improvement in silver demand.
From a 4-hour cycle perspective, silver has been moving within a downward channel recently, with rebound strength evidently lacking. The Relative Strength Index (RSI) now sits near 31, already close to oversold territory, showing pronounced short-term downside. However, oversold does not mean an immediate reversal—more likely, it points to a technical need for correction. On the upside, watch resistance near $63.00 and $68.09; only a sustained return above the 20-day EMA may relieve current bearish pressure. Before that, rebounds may still face selling on rallies.
Editorial Conclusion
Editor: Zhu Henan
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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