Silver is holding above its $63 support zone even after a hotter-than-expected US core inflation reading raised the odds of a Fed rate hike this week. Surging oil prices above $100 have driven a broader hawkish repricing that weighs on the metal, leaving Wednesday's FOMC decision as the next major test.
Silver holds $63 despite hawkish repricing
Silver rose on Friday even after US core inflation came in hotter than expected, a reaction one analyst called odd given the data strengthened the case for a Fed hike. Markets now assign an 87% probability to a 25 basis-point increase on Wednesday.
The broader backdrop remains negative for precious metals. Oil's surge above $100 has triggered a hawkish repricing across markets, pushing real yields higher. That combination normally pressures silver, yet the metal has held above the key $63.00 support zone.
FOMC decision looms as key catalyst
The next major test comes Wednesday with the FOMC decision. A 25 basis-point hike is widely expected and would mark the Fed's first rate increase since 2023. The bigger risk for silver is not the hike itself but the dot plot and tone of the accompanying communication, since a hawkish surprise could push real yields even higher.
Developments in the Middle East remain a key focus alongside the Fed. Rising oil prices have been the dominant driver of markets through their effect on inflation expectations, and a de-escalation could reverse that, pushing oil lower and unwinding some of the more aggressive rate-hike bets. That would likely provide relief for silver.
Technical picture stays tilted lower
On the daily chart, silver trades at the key 63.00 support zone, where buyers can position with defined risk for a rally toward the 71.55 resistance level. A break lower would open the door to the 55.00 level next. On the 4-hour chart, a downward trendline defines the bearish structure, while the 1-hour chart shows a minor downward trendline with a swing high near the 65.00 handle as the first target for buyers on a breakout.
Traders are also watching Thursday's US jobless claims figures alongside any shift in Middle East tensions. Until a dovish Fed or an oil price retreat materializes, the fundamental backdrop for silver stays tilted to the downside.
Source: Investinglive
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