Commodities

Silver Price Prediction with the Fed Interest Rate Decision in Focus

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Written By: Faith Maina
Reviewed By: Elliott Laybourne
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    Summary:
  • Silver price has remained within a horizontal channel ahead of the Fed interest rate decision scheduled for Wednesday.

Silver price has made subtle movements on Tuesday morning as investors focus on interest rate decisions from various central banks. Over the course of the week, about 20 central banks are scheduled to present their policy decisions. However, the most influential ones will be those of the US Federal Reserve, Bank of England (BoE), European Central Bank (ECB), and Bank of Japan (BoJ).

In the case of the Fed interest rate decision, which is slated for Wednesday, investors expect an acceleration of its asset-tapering program. This also includes cues on interest rate hikes. A hawkish tone will likely boost the US dollar while exerting pressure on silver price and other precious metals.

The price will also be reacting to the US producer price index (PPI) and retail sales data scheduled for Tuesday and Wednesday respectively. Besides, Wednesday’s Chinese industrial production numbers is bound to impact the market.  

Silver price prediction

Silver price has eased after extending Friday’s gains earlier on Monday. Notably, it has been trading within a horizontal channel since the beginning of December. The channel’s upper and lower border are at 22.64 and 21.83 respectively.

At the time of writing, the precious metal was down by 0.42% at 22.23. On a four-hour chart, it is trading below the 50 and 200-day exponential moving averages.

In the short term, I expect silver price to remain within the aforementioned horizontal channel. In particular, it may continue to experience resistance along the 50-day EMA at 22.45. On the downside, the psychological zone of 22.00 will be the key support level to watch out for.

silver price

This post was last modified on Dec 14, 2021, 07:13 GMT 07:13

Written By: Faith Maina
Reviewed By: Elliott Laybourne

Faith Maina is a financial analyst and economist. She holds a Bachelor’s Degree in Economics and is underway in her Master’s degree course. She has an expansive understanding of global markets and their drivers. Her specialities are currencies, crypto, commodities, and equities. She lives in Nairobi, Kenya with her husband and son.

Published by
Written By: Faith Maina
Reviewed By: Elliott Laybourne