Silver Price Nears Breakout: XAG Price Hovers at $32.26 as Fed Cuts and Ceasefire Loom

Silver (XAG/USD) fell for a third day on Tuesday, trading at $32.26 per ounce in Asian morning trade. The metal is still under pressure as risk appetite improves with growing hopes of a Russia-Ukraine ceasefire. A Reuters report said US President Donald Trump spoke with Russian President Vladimir Putin and the talks will start immediately – without US mediation. This killed safe-haven demand and weighed on silver along with gold.

But Monday’s drop was cushioned by Moody’s downgrade of the US sovereign credit rating from “Aaa” to “Aa1”. Moody’s cited rising debt and higher interest burden, same as Fitch in 2023 and S&P in 2011.

Fed Cuts Back in Focus as Data Weakens

While geopolitics is the main theme, economic fundamentals are also playing a role in silver’s direction. Soft US inflation data – in both CPI and PPI – suggests cooling price pressures and hopes for Fed rate cuts later this year. Retail Sales also missed estimates and questions the strength of the US consumer and overall economy.

According to the CME FedWatch Tool, traders are now pricing in at least two rate cuts by end of 2025, with the first as early as September. Fed officials speak this week and we will be listening for dovish comments.

• CPI and PPI show easing inflation

• Retail Sales miss estimates

• Fed rate cut odds rise, per CME tool

• Moody’s downgrade reinforces economic fragility

These are all supportive of silver as a non-yielding asset in a falling rate environment.

Silver Technical Setup Signals Imminent Move

From a technical perspective, silver is consolidating in a symmetrical triangle on the 1-hour chart. Price is coiling at $32.26, just below the 50-EMA ($32.35) as the triangle nears its apex. This type of pattern often means a breakout is imminent – but direction is unknown.

MACD is flat with signal lines close together, no strong momentum. Candlesticks have small bodies and long wicks, hesitation. Watch $32.37 for a bullish break, below $31.98 for more downside.

• Break above $32.37: $32.69, $32.93

• Break below $31.98: $31.68, $31.42

For newbies: this is like a spring getting tighter and tighter—once it pops, price often goes fast. Let price lead, wait for volume confirmation before entering.