Silver price outlook with Chinese data and Fed meeting in focus

Silver price has remained range-bound ahead of the Fed interest rate decision. Industrial data from China is also expected to influence the commodity price path in the ensuing sessions. As at the time of writing, the metal was up by 0.56% at 23.70.

Fed interest rate decision

As has been the case in recent sessions, investors’ focus is on the Fed interest rate decision set for release on Wednesday. Indeed, this explains silver price’s range-bound trading for over a month now.

The US central bank will likely hike interest rates by 25 basis points. This would be the second consecutive meeting that the Fed has dialled back on the rate increases. With recent data pointing signalling that inflation has peaked, the bank may not have a super-sized hike of 75 basis points in the pipeline. However, rate increases may persist as it strives to bring inflation back to its 2% target.  Based on this forecast, silver price may be subject to curbed gains in the short term.

Chinese demand

Data from China is also expected to impact silver price in the new week. This is founded on the fact that the Asian country is the leading consumer of silver and other industrial metals.

Chinese manufacturing PMI and industrial profit figures are set for release on Tuesday. The data comes amid heightened optimism over the nation’s reopening. Indeed, I expect it to remain one of the metal’s major bullish driver.

Silver price prediction

Silver price has been range-bound since mid December; largely trading between 23.15 and 24.56. More particularly, 24.00 has been a critical resistance level in recent sessions as investors await further cues in the form of the Fed interest rate decision.

As shown on its daily chart, it is hovering around the 25-day EMA while remaining above the medium-term 50-day EMA. While my stand on silver price path is rather neutral , I still have a bullish inclination. For as long as the commodity remains above 22.00, I expect the bulls to remain in control.

As analysts expect the Fed to shrink interest rates hikes again, it will be interesting to see if that will be a catalyst enough to break the resistance at 24.56 and rally further towards the next target at 25.12. On the flip side, a move below 23.15 may give the bears an opportunity to test the lower support at 22.24.

silver price
silver price

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