Silver price is testing the steadiness of the support at $24 ahead of the highly anticipated FOMC meeting in the coming week. Analysts and investors alike expect the US central bank to begin tapering its monthly asset purchases.
Besides, there are rising expectations that the Fed will start hiking interest rates within a year and do so at least twice by the end of 2022. A high interest rate environment will likely push precious metals lower as Treasury yields surge.
The precious metal is hovering around the crucial level of 24 in Friday’s session. For over a week now, this level has been a crucial support zone after remaining evasive for a month.
At the time of writing, silver price was down by 0.78% at 23.88. At its level, it is down 3.81% from last Friday’s high. On a three-hour chart, it is trading below the 25 and 50-day exponential moving averages.
Since Tuesday, the metal has been trading within a rather tight range of between 24.25 and 23.75. In the ensuing sessions, I expect it to remain within that horizontal channel.
This thesis is founded on the assertion that traders will likely avoid placing huge bets ahead of the Fed meeting in the coming week. Past the upper and lower borders, the zones to watch will be 24.50 and 23.50 respectively.
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