XAG/USD dips to $69.85 as traders take profits ahead of the Fed’s expected rate hold at 3.50%-3.75%.
Silver (XAG/USD) fell to $69.85 in early European trading Tuesday, retreating from a weekly high as investors locked in gains before the US Federal Reserve’s policy decision. The Fed is widely anticipated to leave its benchmark rate unchanged at 3.50%-3.75% on Wednesday, though markets remain cautious amid shifting rate-hike expectations.
Recent progress in US-Iran peace talks has eased geopolitical tensions, potentially capping silver’s losses. However, technical indicators show persistent downside pressure, with XAG/USD trading below its 100-day simple moving average. The Relative Strength Index sits just below 50, signaling weak but not extreme bearish momentum. Resistance levels are eyed at $72.25 and $74.14.
Fed rate-hike bets have softened, with December odds dropping to 58% from nearly 70% last week, according to the CME FedWatch tool. Precious metals, as non-yielding assets, benefit from lower rate expectations but face headwinds from a stronger USD and profit-taking ahead of key events.