Silver Rebounds as Dollar Weakens Ahead of Key FOMC Minutes

Silver prices (XAG/USD) have rebounded in early European trade on Tuesday, climbing from $60.30 to near $61.00. This recovery comes as the US Dollar Index (DXY) retreats from a fresh annual high of 102.54, reaching around 101.95 at press time. The decline in the dollar has provided some relief to silver, which has been under pressure due to the greenback's recent strength.

Market experts, including strategists at Brown Brothers Harriman (BBH), expect the US Dollar to maintain its upward momentum. They highlight that recent US business surveys, such as the September ISM indexes, support the Federal Reserve's hawkish stance. The data indicates resilient economic growth and intensifying inflation pressures, reinforcing the Fed's likelihood of another rate hike in December.

Investors are awaiting the release of the Federal Open Market Committee (FOMC) minutes from the September policy meeting, scheduled for Wednesday. In that meeting, the Fed raised rates by 25 basis points to 3.75%-4.00% and signaled at least one more hike this year. The outcome of these minutes could provide further clarity on the Fed's interest rate outlook.

Technically, silver remains bearish in the short term, trading below its 20-day exponential moving average (EMA) at $62.99. The Relative Strength Index (RSI) stands at 42.27, suggesting persistent downside pressure. Immediate resistance is at the 20-day EMA, while the RSI indicates that sellers still have control, leaving silver vulnerable to further declines.