Silver Price Dips Amid US Dollar Strength and Hawkish Fed Repricing

The Silver price (XAG/USD) has remained flat on Tuesday, hovering around $60.80, its lowest level in nearly two months. It's struggling to break above $61.00 and is on track for an 8.5% monthly selloff in September. The US Dollar's surge, fueled by long-term yields at multi-decade highs and markets pricing in at least one more Federal Reserve rate hike in Q4, has led to a nearly 2% USD rally in September.

John Velis, analyst at BNY Markets, attributes the market's behavior to perceptions of central bank credibility. Markets are expecting policymakers to raise rates in response to rising inflation, which is pushing real yields up and weighing heavily on precious metals.

The technical analysis shows a bearish Head & Shoulders pattern with the neckline at $62.20. The Relative Strength Index (14) has slid below 40, and the Moving Average Convergence Divergence (MACD) indicator is in negative territory. Bears are pushing against support around the September 9 low of $60.87, with further down targets at $59.30 and $58.15.