Silver (XAG/USD) traded virtually unchanged around $70.00 on Tuesday after reclaiming its 200-day Simple Moving Average (SMA), with market participants showing caution ahead of the Federal Reserve's upcoming monetary policy announcement [1]. Despite a weaker US Dollar and lower Oil prices—factors that typically support precious metals—Silver struggled to gain further momentum. The recent decline in Oil prices followed a framework agreement between the United States and Iran over the weekend, which has helped ease inflation concerns and prompted some buyers to return to the Silver market [1].
Since the onset of the war, Silver has behaved more like an interest rate-sensitive asset rather than a traditional safe haven, with the war-driven energy shock leading traders to reduce expectations for Fed rate cuts and even consider the possibility of a rate hike later this year. This shift pushed XAG/USD down more than 30% from its pre-war levels [1]. Technical analysis indicates that Silver maintains a bearish near-term bias, trading below the 100-day SMA at $78.54 but marginally above the 200-day SMA at $68.74. The 200-day SMA is providing tentative medium-term support, while the 100-day SMA acts as resistance [1].
Momentum indicators are showing early signs of stabilization: the Relative Strength Index (RSI) has recovered to 45.49 from near-oversold levels, suggesting that selling pressure is easing, and the MACD, though still negative, shows weakening bearish momentum [1]. If Silver fails to hold above the 200-day SMA, the next major support is near $60.00, while a daily close above the 100-day SMA could open the door for a move toward resistance near $90.00 [1].
Traders remain hesitant to make large directional bets until after the Fed's policy announcement, which is expected to be the next major catalyst for Silver's price direction [1].
CONCLUSION
Silver is currently consolidating near its 200-day SMA as traders await clarity from the Federal Reserve's policy decision. While technical indicators suggest some stabilization, the market remains cautious, with key support and resistance levels in focus. The Fed's announcement is likely to determine Silver's next significant move.