Silver Price Forecast: XAG/USD trades firmly near $49.00 ahead of speeches from Fed speakers

• Silver price clings to gains near $49.00 despite receding Fed dovish bets.

• Improving US-China trade relations weigh on demand for safe-haven assets.

• Investors await speeches from Fed members for fresh cues on the monetary policy outlook.

Silver price (XAG/USD) holds onto gains near Thursday’s high around $49.00 during the Asian trading session on Friday. The white metal trades firmly even as traders have trimmed bets supporting another interest rate cut by the Federal Reserve (Fed) this year.

According to the CME FedWatch tool, the probability of the Fed cutting interest rates by 25 basis points (bps) to 3.50%-3.75% in the December meeting has eased to 72.8% from 91.1% seen a week ago.

Fed dovish expectations have receded after Chairman Jerome Powell stated in the monetary policy announcement on Wednesday that the December rate cut is “far from a foregone conclusion.”

Easing Fed dovish expectations bode poorly for non-yielding assets, such as Silver.           

In Friday’s session, investors will focus on speeches from Federal Open Market Committee (FOMC) members: Atlanta President Raphael Bostic and Cleveland President Beth Hammack during the North American session. Investors would like to know more clarity on Powell’s argument against reducing interest rates in December.

Meanwhile, improving trade relations between the United States (US) and China have also diminished the safe-haven demand for Silver. On Thursday, US President Donald Trump stated that China will export rare earths to Washington openly and freely, and is ready to cooperate on fentanyl issues, and to accelerate agricultural trade.

Silver technical analysis

Silver price trades in a tight range around $49.00. The near-term trend of the precious metal has become uncertain as it struggles to return above the 20-day Exponential Moving Average (EMA), which trades around $48.55.

The 14-day Relative Strength Index (RSI) slides below 60.00, suggesting that the bullish momentum has ended for now.

Looking down, the September 23 high of $44.47 would remain a key support. On the upside, the all-time high of $54.50 might act as key barrier.

Silver daily chart