Experts Predict Silver’s Future Price Outlook Amid Fed’s DecisionFebruary 11, 2023
The Federal Reserve’s meeting was held today and the officials have discussed key economic factors such as the hike in interest rates, the likelihood of hyperinflation, and the economy going into recession.
Even though any official insight about the meeting is yet to be disclosed but money and commodity markets started to feel the aftermaths of the meeting.
Talk of commodities, the price of silver struggled to keep hold of the 20-day EMA at $23.66 and plunged toward the new low today, at $23.40s. As Silver failed to capitalize on its earlier gains, gold also remained vulnerable.
On the other hand, many investors withdrew their money from the market as they are uncertain about the decision of the Fed and how the market will react to the Fed’s decision.
Investors seemed to gear up to cope with the US Federal Reserve’s monetary decision. However, investors have to realize that the price of silver is not only subjected to the Fed policy rate.
But it also depends on various factors such as market demand and economic and political outlook.
Current Outlook Shows Silver Might Struggle For Sometime
As of now traders are switching their positions about silver and waiting for the Fed chair to clear up some things.
Silver felt the pressure of the Fed’s meeting and the possible interest rate hike. As the result, it is currently trapped in its Tuesday price action.
But by the end of Wednesday, the price of Silver slightly declined.
On Wednesday, Silver was tested with the 50-day EMA at $23.11, however, the commodity quickly failed to keep up with it. By the end of Wednesday, the price of silver plunged even below Monday’s low.
Some of the Key Indicators Have Turned Bearish For Silver
Talk of the technical indicators for momentum such as RSI has turned bearish. ROC on the other hand shows that sellers are gaining momentum as selling pressure mounts.
In case Fed decided to increase the policy rate by .25 basis and beyond and silver prices further decrease, the first level of resistance for silver will be at around $23.00, before further declining to $22.76.
In case of if Silver managed to turn the scenario around and started to reclaim its price within a few days, the first level of recovery will be at around $24.00, before further rising.
Once the current fed’s mess about the increase in policy interest rate will be cleared, silver is likely to challenge the year-to-date high of $24.54, before finally rallying to a further high at the $25.00 mark.
How Interest Rate Hike Can Control Silver Price?
When the interest rate goes high, it decreases borrowing power by making borrowing more expensive.
Silver is popular because of its industrial use, so if the Fed’s increased the interest rate it will significantly lower the industrial demand for Silver.
Secondly, a high-interest rate will give much-needed gain to USD and US bonds, so rather than investing in Silver, investors would like to buy USD and US bonds.
So, a high-interest rate will be more favorable for the fiat currencies and bonds.
According to multiple experts, silver prices are expected to go high later in 2023, as demand will increase by the end of 2023.
As compared to 2022, the industrial and investors’ demand for silver in 2023 is much higher.
As of this writing, the time is not right for you to invest in Silver, you should consider investing in silver by the end of 2023 as the economy will be more stable and the fed will be clear about the policy rate.
Right now fixed income investments are more feasible and suitable for investors because they offer higher profit yields.
In the case of the U.S. Federal Reserve’s Chair Jerome Powell announcing to increase in the interest rate of higher than .25 basis, it will surely push silver and all other metals towards a strong bearish hold.