Silver Price Forecast: XAG/USD remains sideways near $27.60 as investors reassess Fed rate cut bets
Source Fxstreet
- Silver price consolidates around $27.60 as traders reprice Fed rate cut hopes.
- Sticky US inflation will feed expectations for Fed delaying rate cuts.
- Investors see the Fed keeping interest rates steady next week.
Silver price (XAG/USD) remains stuck in a tight range around $27.60 in Friday’s American session. Traders reassess expectations for the Federal Reserve (Fed) rate cuts as the United States core Personal Consumption Expenditure Price Index (PCE) for March remain higher than the consensus.
The annual underlying inflation data rose by 2.7% from the estimates of 2.6% but decelerated from the prior reading of 2.8%. On a month-on-month basis, price pressures grew in line with expectations and the prior reading of 0.3%. Price pressures remaining higher fuel expectations for Federal Reserve (Fed) maintaining a hawkish monetary policy framework.
The scenario is favorable for the US Dollar and bond yields but weighs on non-yielding assets, such as Silver. The US Dollar Index (DXY) rebounds from 105.40 amid expectations that the Fed will keep interest rates higher for a longer period. The Fed sees rate cuts appropriate only when they get evidence that inflation will return to the desired rate of 2%. 10-year US Treasury yields are down 1.15% to 4.65%.
Meanwhile, investors shift focus to the Fed’s interest rate decision, which will be announced on May 1. The Fed is anticipated to keep interest rates unchanged in the range of 5.25%-5.50%. Though the Fed is expected to maintain the status quo, investors will focus on guidance on interest rates.
Silver technical analysis
Silver price corrects to near March 2022 high near $27.00 after failing to extend upside above the crucial resistance of $30.00. The near-term appeal for Silver seems uncertain as it struggles to sustain near the 20-day Exponential Moving Average (EMA), which trades around $27.20.
The 14-period Relative Strength Index (RSI) shifts into the 40.00-60.00 range from the bullish range of 60.00-80.00, suggesting that the bullish momentum has faded for now.
Silver daily chart
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
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Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
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Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
