Silver Price Forecast: XAG/USD posts fresh two-week low near $30, Fed policy in spotlight

• Silver price declines to near $30.20 amid firm bond yields ahead of Fed’s policy meeting on Wednesday.
• US bond yields remain firm on expectations that the Fed will signal fewer interest rate cuts for 2025.
• The US Dollar surrenders gains despite better-than-anticipated growth in the US Retail Sales data for November.

Silver price (XAG/USD) refreshes a two-week low near $30.20 in the North American session on Tuesday. The white metal faces selling pressure as bond yields extend its winning streak for the seventh trading day and climbs above 4.40%.

Higher yields on interest-bearing weigh on non-yielding assets, such as Silver, given that they result in elevated opportunity costs for them.

US Treasury yields have performed strongly ahead of the Federal Reserve’s (Fed) policy decision on Wednesday. The Fed is expected to cut interest rates by 25 basis points (bps) to 4.25%-4.50% but will choose “hawkish” guidance for the interest rate path for 2025.

Analysts at Macquarie said in a note that the “recent slowdown in the pace of US disinflation, a lower Unemployment Rate than what the Fed projected in September, and exuberance in US financial markets are contributing to this more hawkish stance.”

Meanwhile, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, gives up intraday gains and turns flat slightly below 107.00. The US Dollar (USD) surrenders gains even though the United States (US) monthly Retail Sales data for November beats estimates. The Retail Sales data, a key measure of consumer spending, rose by 0.7%, faster than estimates and the former release of 0.5%.

Silver technical analysis

Silver price posts a fresh two-week low near $30.20 on Tuesday. The white metal weakens after breaking below the 20-day Exponential Moving Average (EMA), which trades around $31.00.

The 14-day Relative Strength Index (RSI) oscillates inside the 40.00-60.00 range, suggesting a sideways trend.

Looking down, the upward-sloping trendline around $29.50, plotted on a daily timeframe from the February 29 low of $22.30, would act as key support for the Silver price. On the upside, the horizontal resistance plotted from the May 21 high of $32.50 would be the barrier.

Silver daily chart