Silver (XAG/USD) experienced a notable decline, trading just above $61.00 per troy ounce during Wednesday's European session, following a sharp 5.3% sell-off on Tuesday [1]. According to FXStreet data, silver was priced at $61.15 per troy ounce, down 0.72% from $61.60 on Tuesday, and has fallen 13.97% since the start of the year [2]. The Gold/Silver ratio stood at 66.58 on Wednesday, slightly lower than Tuesday's 66.74, indicating a minor shift in relative valuation between the two metals [2].
The sell-off in silver is attributed to a combination of factors, including expectations of Federal Reserve interest rate hikes and ongoing geopolitical tensions in the Middle East, which have dampened hopes for a durable peace deal [1]. Recent US economic data shows inflation remaining well above the Fed's target, prompting a hawkish shift in the central bank's rhetoric. The CME's Fed Watch Tool indicates a 36% probability of a rate hike in July and 68% in September, both higher than last week's figures of 28% and 50%, respectively [1]. This outlook has strengthened the US Dollar, further pressuring silver prices [1][2].
Technical analysis reveals that XAG/USD hit fresh 2026 lows at $60.74 earlier in the day, with momentum indicators approaching oversold levels. The Relative Strength Index (14) on 4-hour charts is near 30, suggesting oversold conditions, while the MACD remains below zero, indicating persistent selling pressure [1]. If silver falls below the session low of $60.74 and the psychological $60.00 mark, the next downside target is the 161.8% Fibonacci extension at $58.25, followed by the December 4 low at $56.47. On the upside, resistance is expected at previous support levels of $63.31 and Monday's highs near $67.00 [1].
Both articles highlight that silver's price movements are influenced by factors such as US Dollar strength, interest rate expectations, geopolitical instability, and industrial demand. The strong US Dollar and hawkish Fed stance are currently keeping silver prices subdued, while technical indicators warn of potential oversold conditions that could limit further declines [1][2].
CONCLUSION
Silver prices have come under significant pressure, trading just above $61.00 per troy ounce after a steep sell-off, driven by a strong US Dollar and expectations of higher US interest rates. Technical indicators suggest the market is approaching oversold territory, which may temper further declines. The outlook remains cautious as investors monitor Fed policy and geopolitical developments.