Silver holds firm as Dollar slides after split Fed decision
- Silver steadies as Fed hold weakens Dollar despite yield spike.
- Three Fed dissenters favored hikes, keeping inflation worries elevated.
- Warsh reiterates inflation focus but offers limited policy guidance.
Silver price clings to gains on Wednesday late in the North American session, as the Federal Reserve held rates unchanged, which, instead of strengthening the Dollar, weakened it, while US Treasury yields spiked. The XAG/USD trades at $57.17, barely unchanged.
XAG/USD steadies near $57.00 as Fed dissent, surging long-end yields and Dollar weakness drive choppy trading
The Fed's monetary policy statement was barely changed. The central bank noted that the economy is growing steadily despite uncertainty stemming from the US-Iran war. The central bank revealed that productivity growth and capital investment are robust, further strengthening the jobs market.
Worth mentioning that the decision was split, with three dissenters led by the Cleveland Fed's Beth Hammack, Minneapolis Fed's Neel Kashkari, and Dallas Fed's Lorie Logan, who favoured a 25-basis-point rate hike.
The press conference didn’t provide any remarks worth mentioning. Although the Fed Chair, Warsh, revealed that he’s committed to tackling inflation, he dodges the question of how the Fed will achieve its 2% goal. Meanwhile, the US 30-year Treasury yield spiked by more than 10 basis points to its highest level in almost 20 years, though it failed to boost the Greenback, which is tumbling over 0.40%, according to the US Dollar Index (DXY).
The DXY, which tracks the performance of the US Dollar against six currencies, is down at 100.93, after hitting a six-day low, despite the rise of US yields.
Ahead, the US economic docket will feature the final reading of Q2 2026 US GDP, the release of the Fed’s preferred inflation gauge, and the University of Michigan Consumer Sentiment.
XAG/USD Price Forecast: Technical Outlook
In the daily chart, XAG/USD trades at $57.15, keeping a bearish near-term tone as spot holds well below the latest simple moving average cluster around $64.33 and under a series of descending trend-line resistances, including the more recent lines derived from the $78.83 and $77.02 peaks. The Relative Strength Index (14) hovers near 41, hinting at subdued downside momentum, but with price compressed between immediate trend-line support near $55.98 and the overhead moving averages, the metal remains capped within a broader descending channel.
On the topside, initial resistance aligns with the former support trend line projected from $61.01, ahead of the confluence of the simple moving average triple and a descending trend-line break around $64–65, while a more significant supply zone emerges toward the $80.76 region associated with the longer-term downtrend from $96.62. On the downside, a clean drop through the nearby trend-line support at roughly $55.98 would expose lower levels and extend the prevailing bearish phase, whereas holding above this line could see XAG/USD attempt another corrective bounce back toward the clustered resistance band overhead.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
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