Predicting the price of silver with the Fed’s interest rate decision at a glance

The price of silver made subtle movements on Tuesday morning as investors focused on the interest rate decisions of various central banks. During the week, around 20 central banks are expected to present their policy decisions. However, the most influential will be those of the US Federal Reserve, the Bank of England (BoE), the European Central Bank (ECB) and the Bank of Japan (BoJ).

In the case of the Fed’s interest rate decision, scheduled for Wednesday, investors expect its asset tapering program to accelerate. It also includes clues about interest rate hikes. A hawkish tone will likely boost the US dollar while putting pressure on the price of silver and other precious metals.

The price will also react to the US Producer Price Index (PPI) and retail sales data expected for Tuesday and Wednesday respectively. In addition, Wednesday’s Chinese industrial production figures are expected to have an impact on the market.

Predicting the price of silver

The price of silver eased after extending Friday’s gains earlier on Monday. It has been trading in particular within a horizontal channel since early December. The upper and lower edges of the channel are at 22.64 and 21.83 respectively.

At the time of this writing, the precious metal was down 0.42% to 22.23. On a four hour chart, it is trading below the 50 and 200 day exponential moving averages.

In the short term, I expect the price of silver to stay in the aforementioned horizontal channel. In particular, it could continue to experience resistance along the 50 day EMA at 10:45 pm. On the downside, the 22.00 psychological zone will be the key support level to watch.

See also

money price
money price

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