Silver (XAG/USD) is trading with caution near $30.00, as a surge in the US Dollar and Treasury yields continue to weigh on the upside of the metal. The global market sentiment is risk-averse since technology stocks experienced a sharp sell-off due to fear of competition from cheap AI models coming out of China. This has increased safe-haven demand for the US Dollar, pushing the Dollar Index near 108.00. Technically, Silver is holding above its 200-day EMA at $29.50, indicating a broadly bullish trend, but struggles near key resistance levels around $30.40 and $30.90. Investors await the Federal Reserve’s monetary policy announcement and Jerome Powell’s guidance for clues on interest rate trajectory, which could further influence Silver prices.

KEY LOOKOUTS

• A strong US Dollar Index near 108.00 amid safe-haven demand could continue to weigh on Silver prices, limiting upside potential despite global market jitters.

• Investors are focused on the Federal Reserve’s decision to keep interest rates steady and Jerome Powell’s guidance on the future policy trajectory, impacting bond yields and Silver trends.

• It is facing immediate resistance near $30.90, the upside trendline; and near the area of the 50-day EMA located at $30.40.

• Overall, risk aversion, linked to the latest round of sell off in technology-related stocks and heightened competition from Chinese AI, serves to perpetuate safe havens such as the US dollar and Silver.

Silver (XAG/USD) is under pressure near the $30.00 mark, as a surge in the US Dollar and treasury yields weigh on the metal’s upside momentum. The DXY index has risen to near 108.00 on safe-haven demand due to global selling in tech stocks and increased risk aversion in the market. On the technical side, Silver finds resistance near the 50-day EMA at $30.40 and an upward-sloping trendline around $30.90. The 200-day EMA has provided support around $29.50. The investors are watching out for the Federal Reserve monetary policy statement and Chairman Jerome Powell’s assessment that might make a big difference to the Silver direction in the near term.

Silver (XAG/USD) is trading cautiously around $30.00 as the stronger US Dollar and increasing Treasury yields keep upside in check. Investors await the Federal Reserve’s policy decision for further market cues.

• Silver (XAG/USD) is trading around $30.00 in a jittery market with increasing US Dollar strength.

• Dollar Index (DXY) rises to 108.00, boosted by safe-haven demand due to the sell-off of global technology stocks.

• Risk aversion takes the center stage as worries about China’s low-cost AI models weigh on the technology markets and add to market uncertainty.

• Silver finds critical resistance at $30.40 (50-day EMA) and $30.90 (up-sloping trendline).

• Silver stays positive above the 200-day EMA at $29.50 despite short-term pressure.

• Markets await the Fed monetary policy announcement, which is expected to hold interest rates steady at 4.25%-4.50%.

• Traders would be looking for Fed Chair Powell’s views on whether the future policy path has a silver lining.

Silver (XAG/USD) is treading with caution above the $30.00 hurdle due to its overall weakened upside momentum with a sharper US Dollar and higher Treasury yields. The Dollar Index (DXY) has surged to near 108.00 supported by safe-haven demand amid a global sell-off in technology stocks, fueled by concerns over China’s low-cost AI models for challenging the dominance of the leading chatbots. The market sentiment remains deeply risk-averse, causing increased appeal for the US Dollar, which has added pressure on Silver despite its traditionally safe haven status. On the technical side, Silver is capped by the 50-day EMA at $30.40 and the rising trendline at $30.90, but remains positive above the 200-day EMA at $29.50.

XAG/USD Daily Chart

TradingView Prepared by ELLYANA

Investors are now looking to the Federal Reserve’s monetary policy decision, which is expected to keep the rate-easing cycle on hold and keep rates steady at 4.25%-4.50%. The Fed’s comments, especially from Chairman Jerome Powell, will be crucial in determining the direction of market sentiment and the trend of Treasury yields and the US Dollar. These are the factors that will have a huge impact on Silver prices, which is also responding to the overall risk-off sentiment that is sweeping global markets. Silver will likely remain in a tight trading range until there is clear guidance from the Fed, oscillating between technical levels and macroeconomic drivers.

TECHNICAL ANALYSIS

Silver (XAG/USD) is testing key levels, with immediate resistance near the 50-day Exponential Moving Average (EMA) at $30.40 and an upward-sloping trendline around $30.90. A sustained move above these levels could open the door to further bullish momentum. On the downside, strong support is observed near the 200-day EMA at $29.50, which aligns with Silver’s broader bullish trend. The 14-day Relative Strength Index (RSI) oscillates within the neutral 40-60 range, signaling a lack of clear directional momentum. Until Silver breaks out of these defined levels, the metal is expected to trade in a sideways pattern, influenced by external macroeconomic factors.

FORECAST

Silver (XAG/USD) has the potential for an upward breakout if it successfully holds above the 200-day EMA at $29.50 and breaks the immediate resistance at $30.40. An upward move above the rising trendline near $30.90 opens the door to testing higher levels, and the next significant resistance is around $31.50. The metal’s attractiveness may rise further in a risk-sensitive environment, especially if uncertainty in other parts of the world persists or economic conditions support safe haven demand. But more than that, doves at the Federal Reserve or a US Dollar weakening would propel Silver upwards in the following days.

And to the downside, Silver is also at risk if the US Dollar will keep on climbing up on the back of higher yields for bonds and risk-off mood. A break below the 200-day EMA at $29.50 would turn negative, with additional losses towards $28.70 or even $28.00 likely. Higher hawkishness from the Fed or stronger than expected US data could further deteriorate the downside risks. A global market risk reduction as well as reduced safe haven demand could also drag Silver prices downwards.