Silver Price Forecast: XAG/USD plummets to near $52 as Fed’s Waller cautions larger rate hike

• Silver price plunges to near $52.20 as Fed’s Waller warns of bigger interest rate hike.
• The US Dollar draws strength from Fed Waller’s warning of aggressive policy tightening.
• Investors keenly await the US CPI data for October.

Silver price (XAG/USD) is severely down over 2% to near $52.20 during the European trading session. The white metal faces a sharp selling pressure as Federal Reserve (Fed) Governor Christopher Waller has warned of a bigger interest rate hike ahead of the United States (US) Consumer Price Index (CPI) data at 13:30 GMT.

During the European trade, Fed’s Waller said in a speech that further monetary policy tightening is needed and also not rule out the possibility of a larger interest rate hike, if inflationary pressures continue to advance.

“Half-point Fed rate hike may be needed in December, if October core CPI inflation comes in around 0.3% or higher,” Fed’s Waller said.

US inflation expected to cool ahead of key Fed meeting

Economists at Deutsche Bank highlight that, in contrast to September’s strong print, they now anticipate a clear moderation in price pressures. They note that “this time, our US economists expect inflation to have come down from its September pace, with both headline and core at +0.20% on the month,” underscoring expectations for a more subdued October CPI profile going into the next Fed meeting.

Theoretically, fears of aggressive Fed tightening diminish the appeal of non-yielding assets, such as Silver.

The warning of aggressive Fed’s monetary tightening by Governor Christopher Waller has resulted in some relief for the US Dollar (USD). Following Waller’s remarks, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, clawed back its early losses and turned marginally positive above 101.70.

Silver Technical Analysis

In the daily chart, XAG/USD trades at $52.36, maintaining a bearish near-term tone as it holds below the 20-day Exponential Moving Average (EMA) at $54.07. The short-term trend remains pressured while price stays capped under this dynamic barrier, and the Relative Strength Index (14) around 40 suggests weak but not oversold momentum, hinting that sellers still retain an advantage.

On the topside, the 20-day EMA at $54.07 is the first notable resistance, and a daily close above this level would be needed to ease immediate downside pressure and open the way for a corrective recovery. With no nearby technical supports highlighted by the current dataset, any further pullback from present levels would leave XAG/USD vulnerable to probing lower chart-based levels not captured here, keeping focus on whether buyers can reclaim the $54 area to stabilize the outlook.

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