Silver Price: Here’s What to Expect Ahead of Fed Interest Rate Decision

Summary:

Silver price is trading lower as the 10-year US bond yields and US dollar rebound for the second session from Friday's intraday lows.

Silver price is trading lower as the benchmark 10-year US bond yields and the US dollar rebound for the second consecutive session. The 10-year treasury yields are at 1.57 after dropping to 1.53 on Friday. Subsequently, the greenback is at 90.93; up from Friday’s intraday low of 90.68.

Similar to other precious metals, silver price has an inverse correlation to the US dollar. In today’s session, it will further react to the US consumer confidence from the Conference Board. Analysts expect a reading of 113.0, up from March’s 109.7.

However, more focus is on Wednesday’s Fed interest rate decision. The central bank is expected to bear a dovish tone. At the same time, investors’ concerns are on inflation, bond purchases, and the financial risks of surging asset prices. The bank has maintained that the expected inflationary pressures will be transitory and not enough to warrant hikes in interest rates.

Silver Price Technical Outlook

Silver is trading lower as the US treasury yields and the US dollar rebound. After reaching an intraday low of 25.84 on Monday, silver price rose to 26.29 earlier on Tuesday. However, it has since pulled back to 26.16; down by 0.21%. On a 2-hour chart, it is slightly above the 15 and 50-day exponential moving averages.

Silver price is likely to decline in today’s session as the market reacts to the US consumer confidence numbers by the Conference Board. Since January, the released figures have been higher-than-expected, which is a bullish catalyst for the greenback. Besides, the rebounding of the bond yields will further offer support to the dollar. From that viewpoint, the precious metal’s price may drop to find support at 25.84.

However, the Fed’s dovish tone in Wednesday’s FOMC Statement may help the metal recoup its losses by rebounding to 26.41. Above that, the level to watch out for will be 26.65. On the flip side, a move below 25.84 will place the support level lower at 25.50.