- Silver price clings to gains near $32.00 as bets mount for a big Fed rate cut.
- The next action in the US Dollar will be guided by the US Core PCE Inflation data.
- Silver price looks to reclaim decade highs of $32.50.
Silver (XAG/USD) price is holding near the key resistance of $32.00 in the New York session on Wednesday. The white metal is maintaining its strength as the US Dollar remains under pressure amid growing speculation that the Federal Reserve (Fed) will deliver another sizable interest rate cut at one of the two remaining monetary policy meetings this year.
The US Dollar Index (DXY), which tracks the value of the greenback against six major currencies, is holding near the yearly low of 100.20. Meanwhile, 10-year US Treasury bond yields are jumping near 3.77%. Historically, higher yields on interest-bearing assets increase the opportunity cost of holding an investment in non-yielding assets, such as silver. But in this case, the price of silver is holding firm.
According to the CME FedWatch tool, the central bank is expected to further cut its key interest rates by 75 basis points over the remainder of the year, suggesting one 50 basis point cut and one 25 basis point cut. Data on 30-day federal funds futures prices show the probability of the Fed cutting interest rates by a larger than usual margin in November has risen to 59% from 37% a week ago.
Looking ahead, investors will focus on the core U.S. personal consumption expenditures (PCE) price index data for August, the Fed’s preferred gauge of inflation, due out on Friday. Economists estimate the annual measure of inflation has accelerated to 2.7% from 2.6% in July.
Technical analysis of silver
Silver price is approaching the decade high of $32.50. The white metal strengthened after the breakout of the downtrend line from the May 21 high of $32.50. The upward sloping 20-day exponential moving average (EMA) near $30.20 suggests that the short-term outlook for silver price is bullish.
The 14-day Relative Strength Index (RSI) is struggling to stay within the 60.00-80.00 range. A bullish momentum would be triggered if the oscillator manages to do so.
Silver daily chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
