Silver Price Set for A Rebound, As FED’s Waller Prepares Markets for A Rate Cut
The Silver price has retreated $5 off the highs in the last two months, but it has formed a base around the $30 level and is looking ready for a bounce, as the FED prepares for the last rate hike of 2024.
As the conflict in Ukraine escalates, gold and silver have faced sharp declines, with gold dropping $350 and silver falling $5 in the early weeks of November. Despite this steep sell-off, buying interest has reemerged, halting silver’s decline near its 100-day Simple Moving Average (SMA) for the XAG/USD pair. Silver prices briefly dipped below $30 but found strong technical support at this key level, maintaining an overall positive trend characterized by rising lows.
While the recent pullback highlights the metal’s vulnerability to shifts in market sentiment and risk appetite, its ability to hold above this critical support zone suggests the potential for a rebound and continuation of the broader bullish trajectory. A decisive break above $30.60 is required to signal a meaningful recovery, while a drop below the $30 threshold could trigger further declines.
Silver Chart Daily – The 100 SMA Holds As Support
Meanwhile, Federal Reserve Governor Christopher Waller, often seen as one of the most hawkish policymakers, has recently made comments hinting at a rate cut despite robust labor market data. With the Fed’s communication blackout set to begin at midnight on Friday, Waller’s remarks could be pivotal in shaping expectations ahead of the decision. Though his comments suggest dovish leanings, San Francisco Fed President Mary Daly will deliver the final scheduled remarks before the blackout, leaving the market eagerly awaiting further clues on potential policy shifts.
FED’s Waller also appeared, making some comments which leaned on the dovish side, considering recent market expectations. He expressed support for a potential rate cut in December, emphasizing that current monetary policy remains “significantly restrictive” but allows flexibility to slow future cuts if needed. Waller highlighted that inflation forecasts remain on track for a 2% target in the medium term, though recent data indicates progress may be stalling.
On the labor market, Waller noted a year-long trend of moderating demand relative to supply. He also critiqued the average inflation targeting framework as overly backward-looking and suggested that simpler frameworks might yield better results. Lastly, he addressed the inverted yield curve, stating it could signal expectations of lower future inflation and rates.
Silver Live Chart
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