Silver Rises to $61 as US Dollar Eases from Annual High
Silver prices (XAG/USD) have rebounded in early European trading on Tuesday, rising 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, settling around 101.95 at the time of writing. The weakening of the dollar is providing temporary relief for silver, which had come under pressure due to the greenback's recent strength.
Market experts, including strategists at Brown Brothers Harriman (BBH), anticipate that the US Dollar will continue to perform well due to the resilience of the US economy. They highlight that recent US business surveys support the Federal Reserve's hawkish stance, with the September ISM indexes indicating strong growth and rising inflation pressures. The Fed funds futures market is pricing in a 25 basis point rate hike to 4.00-4.25% in December, reflecting this tightening bias.
Investors are awaiting the release of the Federal Open Market Committee (FOMC) minutes from the September policy meeting on Wednesday for further insights into the US interest rate outlook. At that meeting, the Fed raised rates by 25 basis points to the 3.75%-4.00% range and signaled at least one more hike this year.
Technically, silver remains bearish in the near term, trading at $61.21 and below the 20-day exponential moving average (EMA) at $62.99. The Relative Strength Index (RSI) at 42.27 suggests mild bearish pressure, with immediate resistance at the 20-day EMA. Momentum conditions indicate that sellers retain control, leaving silver vulnerable to further declines unless it breaks above the $62.99 barrier.