Silver price has erased the losses recorded earlier in the week; even as it continues to trade below the once steady support zone of $23.00. This is after being in the red for four consecutive weeks. The easing of the US dollar has boosted the metal ahead of the Fed meeting minutes later on Wednesday.
The easing of the US dollar on Wednesday is largely behind the recorded silver price gains. Granted, the dollar index remains on a rebound as has been the case since mid-July when it dropped below $100 for the first time since April 2022. Indeed, a stronger greenback is the reason for the precious metal’s curbed gains.
Investors now have their eyes on the FOMC meeting minutes scheduled for release later on Wednesday. Analysts expect the minutes to show that a small number of the FOMC officials were in favor of holding the interest rates steady for the rest of the year. On the other hand, most of the officials were likely cautiously optimistic over the US economy experiencing a soft landing. As is the case with other precious metals, an environment of higher interest rates will continue to weigh on silver price.
Silver price technical analysis
Silver has been trading below the once steady support level of 23.00 after dropping past it about a week ago. On Tuesday, it extended its previous losses to a level last recorded on 23rd June at 22.22. It has since rebounded to 22.76 as at the time of writing.
A look at its daily chart shows silver price trading below the 25 and 50-day exponential moving averages; a sign that it will likely remain under pressure at least in the short term. Besides,last week, the short-term 25-day EMA crossed the medium-term 50-day EMA to the downside to form a death cross. This is usually a bearish formation that signals additional losses in the ensuing sessions.
In the immediate term, I expect silver price to continue experiencing resistance at 22.84 ahead of the FOMC meeting minutes. A rebound past this level may curb silver price gains at 23.15. Past that zone, this bearish thesis will be invalid. On the lower side, I still expect the precious metal to continue finding support at 22.15.