Silver Price Forecast: $49 Resistance Holds as Fed Meeting Looms Large
Silver price forecast: XAG struggles below $49 as traders eye Fed rate cut and key U.S. inflation data for next week’s market direction.
Quick overview
- Silver (XAG/USD) closed the week at $48.66, down 0.26%, as traders positioned ahead of key U.S. economic data.
- The metal remains trapped in a descending channel, with resistance at $49.40–$49.88 being strongly defended by sellers.
- Support levels to watch are near $47.51 and $45.98, while a breakout above $49.88 could signal a potential reversal.
- The upcoming Fed rate cut decision could significantly influence silver's direction, with lower inflation typically benefiting precious metals.
Silver (XAG/USD) closed the week at $48.66, down 0.26%, extending its correction from October highs as traders positioned ahead of key U.S. economic data. The metal’s recovery attempts repeatedly stalled below the $49.40–$49.88 resistance range, where sellers have aggressively defended.
On the 4-hour chart, silver remains trapped within a descending channel, reflecting a broader downtrend despite brief stabilization last week.
The 20-EMA ($49.07) and 50-EMA ($49.88) continue to slope downward, confirming that momentum remains tilted in favor of the bears. A decisive breakout above $49.88 would be the first sign of reversal, potentially paving the way toward $50.86 or $52.75, where past demand turned into resistance.
Economic Data Keeps Silver Traders on Edge
The coming week could prove pivotal for silver’s direction as markets brace for a possible Fed rate cut. According to consensus forecasts, the central bank is expected to lower rates to 4.00% from 4.25% on October 29, while investors await Powell’s remarks for clues on future monetary easing.
Recent U.S. data painted a cautiously optimistic picture: core CPI rose just 0.2% and headline CPI eased to 3.0% year-over-year, signaling disinflation. However, a mixed batch of PMI readings and steady housing data suggests that while inflation pressures are cooling, economic momentum remains uneven.
For precious metals like silver, lower inflation and rate-cut expectations typically act as tailwinds, softening the U.S. dollar and boosting demand for non-yielding assets. Yet if the Fed’s tone remains cautious, traders might continue to favor short positions in the near term.
Short-Term Outlook: Watch $47.50 and $45.98
Technically, support rests near $47.51, followed by $45.98, aligning with the lower edge of the descending channel. The RSI at 42 indicates that momentum has stabilized slightly but remains weak.
Key trading levels to monitor:
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Resistance: $49.88, $50.86, $52.75
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Support: $47.51, $45.98, $44.58
Unless silver closes above $49.90, the path of least resistance remains downward. A breakdown below $45.98 could confirm a deeper bearish extension into early November, while a dovish Fed outcome might offer short-term relief for bulls.
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