Silver (XAG/USD) edges lower on Tuesday, remaining confined within a week-old trading range as bullish momentum softens following the recent rally.
At the time of writing, XAG/USD trades around $63.96, down 2.77% on the day
Buyers appear reluctant to chase the metal higher as uncertainty around the Federal Reserve’s (Fed) monetary policy path keeps sentiment cautious. Recent weak US economic data have reduced expectations of an imminent Fed rate hike and helped XAG/USD rebound from near $55 at the start of the month. However, the energy shock caused by tensions in the Middle East keeps inflation risks alive and leaves the possibility of a rate increase later this year on the table.
The prospect of higher interest rates weighs on Silver by increasing the opportunity cost of holding non-yielding assets. Technical Analysis On the daily chart, XAG/USD retains a mild bullish bias while holding above the 50-day Simple Moving Average (SMA) at $61.28 and several key Fibonacci support levels. However, momentum indicators point to consolidation.