Will Federal Reserve Startle Sleepy Silver?

Silver prices are steady in Wednesday trade. In the North American session, the metal is trading at $17.83, up $0.01 or 0.07% on the day.

Silver Yawns after Strong U.S. GDP

The U.S. economy has been showing signs of a slowdown, and investors had braced for a soft GDP, as the forecast for the initial third-quarter reading was just 1.6%. However, the GDP proved to be stronger than expected, with a gain of 1.9%. This was just shy of the 2.0% growth in the second quarter. The strong reading failed to make any impression on precious metal prices, as both gold and silver have shown little reaction after the GDP release.

Ahead – Federal Reserve Expected to Trim

With the release of GDP, market attention has shifted to the Federal Reserve, which will release its monetary decision later in the day. The Fed trimmed rates by 25 basis points at the last two meetings and another cut is a near certainty, which would lower rates to a range between 1.50% and 1.75%. Although the markets have priced in this rate cut, the magnitude of a third straight cut could shake up the markets. Investors will also be keeping a close eye on the rate statement, which could affect investor appetite for safe-haven assets such as silver.

Silver Technical Analysis

Silver flirted with the 50-EMA in mid-October, but since then, the metal has been trading below this line. This points to an upward trend, with the 50-EMA, which is currently at 17.50, acting as support. I would expect silver to continue to test resistance at the round number of 18.00, which has psychological significance. If the metal can break through this line, it could continue to gain ground and move towards the 19.00 level.