Silver (XAG/USD) trades under pressure on Wednesday even as traders reduce bets that the Federal Reserve (Fed) will raise interest rates again in October following softer-than-expected US PCE inflation data. At the time of writing, the metal trades around $60.38 and is set to close September with a loss of nearly 9%.
The white metal briefly strengthened after the inflation data pushed the US Dollar and Treasury yields lower. However, the move proved short-lived as stronger Gross Domestic Product (GDP) and ADP employment figures showed that the US economy remains resilient. The data keeps expectations alive that the Fed could still raise rates later this year as policymakers remain committed to bringing inflation back to the central bank’s 2% target.
These hawkish Fed expectations keep the US Dollar and Treasury yields supported, weighing on non-yielding assets such as Silver, which tend to perform better when borrowing costs are low. Attention now turns to the US ISM Manufacturing PMI on Thursday and the Nonfarm Payrolls report on Friday for fresh clues about the Fed’s policy path.
Technical analysis
On the daily chart, XAG/USD maintains a bearish near-term bias as it holds well below the 50-day, 100-day and 200-day Simple Moving Averages (SMAs).
Momentum reinforces this pressured tone, with the Relative Strength Index (RSI) slipping toward the lower 40s and Moving Average Convergence Divergence (MACD) remaining below zero with a negative reading, while the subdued Average Directional Index (ADX) around 13 suggests a weak but persistent downtrend.
On the downside, initial support emerges at the horizontal level near $60, ahead of a deeper floor at $55 and the more distant $50 zone. On the topside, any recovery would first need to challenge resistance at the 50-day SMA around $63, followed by the 100-day SMA at $65, while the 200-day SMA near $73 remains a broader bearish barrier capping the medium-term outlook.
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