Silver Price Capped by Strong US Dollar Ahead of Central Bank Event
The silver price (XAG/USD) has been influenced by various factors ahead of an upcoming central bank event, which traders have already priced in at a 25 basis point Fed rate hike. The US Dollar (USD) is strong due to oil-driven inflation risks and escalating Middle East tensions.
This has resulted in the safe-haven USD firming near its two-week high, capping the non-yielding XAG/USD price. From a technical perspective, silver's 200-day Exponential Moving Average (EMA) at $64.13 serves as resistance for the white metal. The XAG/USD trades above the 50% Fibonacci retracement of the July-August upswing at about $62.94 and the 61.8% retracement at $61.06, indicating underlying support.
However, negative Moving Average Convergence Divergence (MACD) readings and a Relative Strength Index around 46 suggest that momentum still favors the downside unless the XAG/USD reclaims its 200-day EMA. A clear break below this zone would likely reinforce the prevailing bearish bias.