Gold and Silver benefit from Fed dovish stance, precious metals continue to rise

• Bulls return to gold after the moderate rise in interest rates by the Federal Reserve.
• Silver hits seven-week highs and precious metals appreciate.
• The US Treasury yield falls below 3.5% and sinks the value of the dollar.

gold traders they are cheering again after the Federal Reserve (Fed) confirmed on Wednesday expectations of a modest 25 basis point interest rate hike. The shiny metal has recovered to $1,970, returning to the bullish path after pulling back from year-to-date highs on Monday and Tuesday. All precious metals have benefited from the all-important central bank decision, with silver hitting a 7-week high just below $23 to continue its uptrend.

Falling US Treasury yields, with the 10-year yield below 3.5% following the Fed’s decision, is behind this move, as the US dollar, the measure of all commodity markets, including Gold and Silver, is highly correlated with it.

Gold price technicals suggest that the bulls will continue to rise.

The gold price still has some way to go before testing the above $2,000 levels seen at the spike early Monday, a trend that is likely to continue according to market analysts.

Pablo Piovano, news writer for FXStreet, believes that another visit to the round psychological signal “is in the offing.” Piovano analyzes the open interest data of the CME Group in the gold futures market to support this bullish thesis:

“The precious metal’s rally was driven by a small increase in open interest, which continues to support continued bullish momentum in the very short term.”

Anil Panchal, Technical Analyst at FXStreet, takes an in-depth look at the technicals of XAU/USD price action, and sees room for a consistent rally as Gold remains out of overbought territory despite uptrend observed in recent weeks:

“Gold price extends its rebound from the 50-bar Simple Moving Average (SMA), supported by the impending bullish crossover in the Moving Average Convergence and Divergence (MACD) indicator and the bullish line in the Relative Strength Index (RSI). ), not overbought.”

Gold Price Technical Analysis by Anil Panchal, FXStreet News Writer

According to Panchal, the “bullish resistance line from two months ago, near $2,015, acts as the last defense for gold bears.”

Silver price surges to 7-week highs, but bulls face multiple hurdles ahead

The price of Silver has advanced even further than its brighter counterpart, as XAG/USD shot to a seven-week high on the back of the Federal Reserve meeting, just reaching the $23 signal before turning back below. her. Silver had not risen as sharply last week, but now it is gaining more than Gold.

However, the number two precious metal’s upside is a bit more limited than Gold’s, as the year-to-date highs set in January are still some way off and remain a thick set of resistance. According to Anil Panchal, it will not be easy for the Silver metal to reach new highs so far this year:

“Multiple fences set in early 2023 guard XAG/USD immediate rally near $23.30, $24.00 round figure and $24.30 levels before challenging the year-to-date high of around $24.65.

“Meanwhile, the aforementioned horizontal resistance-turned-support looks like a tough nut to crack for silver bears, as it comprises multiple levels marked since June 2022, as well as the 50 DMA and 100 DMA, while challenging the bears about $22.25-$55.”

Silver Price Technical Analysis by Anil Panchal, News Editor at FXStreet