Silver Edges Lower as Dollar Strength and Fed Caution Weigh on Metals
Silver prices slipped on Monday, tracking the broader pressure in precious metals as the dollar firmed and traders braced for the upcoming Federal Reserve decision.
The metal last traded below $38.51, now a key resistance level after prices failed to reclaim it in early trading. With risk sentiment improving on tariff relief and no fresh Fed dovish pivot confirmed, silver bulls remain sidelined for now.
At 12:32 GMT, XAG/USD is trading $38.06, down $0.10 or -0.28%.
Dollar Index Recovery Undermines Metal Bulls
The U.S. Dollar Index rose 0.61% to 98.26, driven by a partial trade agreement between the U.S. and EU that eased fears of a steeper 30% import tariff. The deal helped lift the dollar while pulling the euro down 0.4% to $1.1693.
Technically, the DXY is closing in on its 50-day moving average at 98.30. A confirmed breakout above 98.95 would add further pressure to dollar-denominated assets like silver.
Fed Decision Looms Large for Silver Sentiment
U.S. Treasury yields were steady, with the 10-year holding near 4.40% ahead of Wednesday’s Fed announcement and Thursday’s PCE inflation print. A 97% probability is priced in for the Fed to keep rates steady, but traders are focused on Powell’s tone for clues on a potential September cut. With equities in Europe pushing to multi-month highs and geopolitical tensions easing, safe-haven demand for silver has softened.
Technical Breakdown Points to $37.50 and Lower
Silver’s failure to hold above $38.51 confirms a short-term breakdown, exposing the July 16 low at $37.50. A breach of that level will turn the near-term trend bearish and likely accelerate downside momentum.
The next major support sits at the 50-day moving average near $36.20—a key line that currently governs the long-term outlook. To regain control, bulls must push prices decisively above $38.51, with $39.53 as the next upside trigger.
Market Forecast: Silver Bias Turns Bearish Below $38.51
With no immediate Fed easing signal, a stronger dollar, and price action stalling below key resistance, silver is vulnerable to further downside.
Unless buyers reclaim $38.51 quickly, traders should prepare for potential tests of $37.50 and $36.20 in the sessions ahead. The broader setup favors sellers until macro or technical catalysts shift the balance.
More Information in our Economic Calendar.
