Silver Price Forecast: XAG/USD consolidates below $80.00 in countdown to Fed’s policy
LONDON (March 18) Silver price (XAG/USD) trades in a confined range below $80.00 during the European trading session on Wednesday. The white metal consolidates as investors await the Federal Reserve’s (Fed) monetary policy announcement at 18:00 GMT.
According to the CME FedWatch tool, traders are confident that the Fed will leave interest rates unchanged in the current range of 3.50%-3.75%. The tool also shows that the Fed is unlikely to cut interest rates before the September policy meeting. Also, the odds of an interest rate cut in the same meeting are slightly over 50%.
Theoretically, the Fed holding interest rates steady for a longer term is an unfavorable scenario for non-yielding assets, such as Silver.
Speculation that the Fed will hold borrowing rates steady for longer has been intensified due to higher oil prices amid conflicts in the Middle East, which involve the United States (US), Israel, and Iran.
Meanwhile, Middle East conflicts are expected to limit the downside in the Silver price. Safe-haven assets, such as Silver, tend to perform better in a heightened geopolitical environment.
Conflicts in the Middle East are expected to escalate further as Iran’s foreign minister Abbas Araghchi has stated in an interview with Al Jazeera that Tehran won’t give up its ambition of building nuclear weapons.
Silver technical analysis
On the four-hour chart, XAG/USD trades in a Descending Triangle chart pattern around $78.50, which signifies a sharp volatility contraction. The downward-sloping border placed from the March 1 high of $96.62 is capping the upside near $84.00. Meanwhile, the downside has been limited by the horizontal support plotted from the March 3 low around $78.00.
The near-term bias is bearish as price holds beneath the 20-period Exponential Moving Average (EMA), which is rolling over near $80.56. The series of lower highs from above $96.00 reinforces a downside structure, while the 14-period RSI consistently wobbles near 40.00, showing persistent weak momentum without oversold relief, keeping selling pressure in control.
Initial resistance is located at the 20-period EMA near $80.56, followed by the downward-sloping border around $84.00. A sustained break above the latter would challenge the bearish bias and open the way toward the $86.00 area. On the downside, the price could slide to the February 17 low around $72.00 if it breaks decisively below the March 16 low around $77.00.
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