Silver Prices Slump as Fed Hikes Loom
Silver prices remain below $64.00 as investors await further interest rate hikes from the Federal Reserve, driven by strong US business activity and rising inflationary pressures. The XAG/USD pair is on track for a 3.7% weekly decline, with bears looking at the bottom of the monthly trading range at $62.30.
Fed officials have hinted at further rate hikes, with Philadelphia Fed President Anna Paulson saying 'modest' rate moves are likely needed to bring inflation to target, and New York Fed President John Williams affirming that 'it is sensible to expect another rate increase by year-end.'
The technical analysis suggests a bearish near-term tone, with momentum indicators in the daily chart reinforcing the view. A break of the $62.30 area would activate a bearish Head & Shoulders pattern, adding pressure towards the August 6 low at $60.87 and the August 5 low at $59.35.
On the topside, initial resistance is located at the $64.60 area ahead of the range top just above $68.00, which has capped upside attempts several times this month.