21 Feb 2025

Silver prices are experiencing pressure above $33 as Federal Reserve policymakers anticipate that interest rates will remain within the current range of 4.25% to 4.50%. Fed officials are finding it challenging to assess the effects of Trump's economic policies on the overall economy. Nevertheless, the general outlook for silver prices remains strong in light of Trump's tariff initiatives.

Silver prices (XAG/USD) are experiencing downward pressure above the significant threshold of $33.00 during North American trading hours on Friday. The decline in the value of the white metal coincides with a strengthening US Dollar (USD), as Federal Reserve (Fed) officials maintain a commitment to a restrictive monetary policy. The US Dollar Index (DXY), which measures the value of the Greenback against six major currencies, has risen to approximately 106.75.

On Thursday, Fed Governor Adriana Kugler indicated that the central bank should sustain current borrowing rates for an extended period, emphasizing that the overall impact of new economic policies introduced by President Donald Trump remains "highly uncertain" and contingent upon specific details.

The prospect of the Fed upholding a restrictive interest rate policy is unfavorable for precious metals, including Silver.

Additionally, concerns regarding President Trump’s tariff initiatives are likely to keep Silver prices under pressure. On Thursday, Trump announced potential tariffs on various goods, including lumber, automobiles, pharmaceuticals, and semiconductors, which could be implemented within the next month or sooner. Market analysts anticipate that these tariffs may contribute to a global economic slowdown.

Investors are also closely monitoring developments in the negotiations between the US and Russia regarding the conflict in Ukraine. This week, Donald Trump expressed willingness to engage in further discussions with Russian President Vladimir Putin to negotiate a ceasefire in Ukraine. A favorable resolution from these peace talks could diminish the safe-haven demand for Silver.

 Technical Analysis  
The price of silver is poised to test a three-month peak of $33.40, achieved on February 14. The outlook for this precious metal remains optimistic, as the 50-day Exponential Moving Average (EMA) is trending upward, currently positioned at approximately $31.33.  

The 14-day Relative Strength Index (RSI) fluctuates between 60.00 and 80.00, indicating a robust bullish momentum.  

On the downside, the ascending trendline originating from the low of $26.45 on August 8 will serve as a significant support level for silver, anticipated to be around $30.00. Conversely, the high of $34.87 recorded on October 22 will represent a critical resistance point.