Silver Struggles Below $33 Mark Amid Fed’s Cautious Stance and Technical Weakness

Silver prices hold steady at $32.51 per troy ounce this morning, posting a modest 0.12% gain despite showing weakness in overnight trading.

The precious metal remains caught between competing economic forces as market participants digest recent Federal Reserve decisions and ongoing geopolitical tensions.

The Federal Reserve maintained interest rates at the 4.25-4.5% range on Wednesday, marking the sixth consecutive hold since December 2024. Fed Chair Powell emphasized a cautious approach, highlighting increasing risks to both inflation and employment.

This stance continues to create headwinds for non-yielding assets like silver, which typically struggle during periods of elevated interest rates. Silver experienced a notable rebound yesterday, rising over 1% to approach the $33 level after previous session losses.

The rally emerged as investors sought safe-haven assets amid persistent economic uncertainties. Despite this recovery, technical indicators reveal underlying weakness as silver recently broke through a bullish correctional trend line on short-term charts.

Current RSI readings at 33.87 signal bearish momentum, while silver’s stochastic indicator shows oversold conditions at 4.75. The contradictory MACD reading of 194.22 provides a rare bullish signal amid otherwise concerning technicals.

Silver Market Outlook

Silver currently trades within a triangle pattern formation, with key support established at $32.50 and resistance looming between $34.87 and $35.40. Indian silver markets reflect global caution, with prices at ₹96,490 per kilogram, down 0.21% today.

Chennai reports higher rates at ₹1,11,000 per kilogram, maintaining stability amid broader market fluctuations. The fundamental outlook remains supportive despite short-term pressures.

The global silver market anticipates its fifth consecutive deficit year in 2025, with industrial demand expected to grow 3% and surpass 700 million ounces for the first time.

Mining production, though increasing 2% to 844 million ounces, still falls short of combined industrial and investment demand. Escalating India-Pakistan tensions over Kashmir add another layer of geopolitical uncertainty, with three major incidents reported this month alone.

Meanwhile, President Trump announced an upcoming press conference regarding a potential UK trade deal, while US-China negotiations remain scheduled for this weekend in Switzerland.

Looking ahead, professional forecasts project silver reaching $40 per ounce by summer’s end, representing a potential 23% gain from current levels.

Market participants now await key technical breakouts, particularly watching if silver can sustain momentum above $35, a level tested three times since May 2024 without establishing a definitive breakout.

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