Silver Price Forecast: XAG/USD tumbles to near $74 as dovish Fed bets remain confined

LONDON (February 17) Silver price (XAG/USD) is down almost 3% near $74.00 during the European trading session on Tuesday. The white metal is under pressure ahead of the opening of the United States (US) markets after an extended weekend.

The commodity has been on the backfoot due to market expectations that the Federal Reserve (Fed) will not cut interest rates in the near term.

According to the CME FedWatch tool, traders are confident that the Fed will not cut interest rates in the March and April monetary policy meetings.

Dovish Fed prospects have remained confined even as the US inflation has cooled down in January. The data showed on Friday that the headline and core inflation dropped to 2.4% and 2.5%, on an annualized basis, respectively.

For fresh cues on the US interest rate outlook, investors await the release of Federal Open Market Committee (FOMC) minutes and the flash Q4 Gross Domestic Product (GDP) data releasing this week.

On the global front, investors await the outcome of second round of talks between the US and Iran in Geneva over the nuclear programme.

Silver technical analysis

In the daily chart, XAG/USD trades at $74.45. The 20-day EMA has rolled over and sits at $83.38, capping rebounds and reinforcing a bearish bias. Price remains beneath this gauge, keeping trend pressure pointed lower. RSI at 42.66 (neutral) drifts down, confirming weak momentum without oversold conditions.

A decisive close above the 20-day EMA at $83.38 would temper downside pressure and open room for recovery, while rejection at that barrier would keep sellers in control. RSI staying below the 50 midline would maintain negative momentum; a push back above it would strengthen any rebound attempt.

FXStreet