silver prices are currently hovering around $29.50, reflecting a cautious sentiment in an illiquid market as the end of the calendar year approaches. Bolstered by a robust U.S. economy, the Federal Reserve’s expectations for the future indicate a federal funds rate of approximately 3.9% by the end of 2025. This positive growth outlook suggests that the Fed is likely to implement fewer interest rate cuts in the upcoming year.
The pressure on silver is largely attributed to the steadfast outlook for the US Dollar, which is expected to maintain its strength amid the anticipation of a moderate easing of monetary policy by the Federal Reserve in 2025. Although 10-year US Treasury yields dipped by 0.5% during the European session, they remain significantly elevated for the year, hovering around 4.60%. The US Dollar Index is experiencing a slight decline but has stabilized around the 108.00 level.
Market sentiment regarding the Fed’s future rate cuts is influenced by their recent projections, indicating a more cautious approach to monetary policy. The shift in stance reflects optimism about U.S. economic growth, as recent data has shown a slowdown in the disinflation trend, prompting policymakers to reconsider the number of rate cuts anticipated for next year.
Investors are eagerly awaiting the release of the US ISM Manufacturing PMI data for December, set to be published on Friday. Current estimates suggest a slight contraction in manufacturing output, with the PMI projected at 48.3, just below the previous figure of 48.4.
silver ’s technical outlook appears uncertain as prices remain below a key upward-sloping trendline following a breakdown near the $30.00 level. Close to the 200-day Exponential Moving Average, the price action suggests a lack of strong direction. A prolonged stay within the 20.00 – 40.00 range of the 14-day Relative Strength Index could signify further bearish momentum. The September low of $27.75 is anticipated to provide support, while resistance is expected around the 50-day EMA near $30.90.
