FX.co ★ XAG/USD, SILVER

Silver During Thursday's European trading session, the price of silver (XAG/USD) increased by 1.5% to over $72.35. After hitting a new three-week low on Wednesday at $70.86, the white metal continues to rise. The Federal Reserve (Fed) left interest rates constant in the range of 3.50% to 3.75%, as anticipated, but warned of upside inflation risks in its monetary policy announcement on Wednesday, leaving the precious metal's future uncertain. "The energy surge has not yet peaked," Fed Chair Jerome Powell stated during the news conference. "We remain attentive to risks on both sides of our mandate." Given that rising energy costs have de-anchored inflation expectations, three rate-setting members argued for a shift away from the easing tendency. As a result of the Fed's hawkish stance, there has also been less conjecture that the Fed will lower interest rates this year. The likelihood that the Fed will lower interest rates once this year has decreased from 18.4% on Tuesday to 3.3%, according to the CME FedWatch tool. As of this writing, XAG/USD is trading higher at about $72.35. But while the price stays below the 20-day Exponential Moving Average (EMA) at about $75.43, the near-term tone is still negative. The distance between the spot and this moving average indicates that rallies are still susceptible, and the Relative Strength Index (RSI), which is currently at 41, is in negative territory but not quite oversold, suggesting that downside pressure is ongoing but not severe. To lessen the current negative bias and pave the way for a more prolonged rebound towards $80, a daily close above the 20-day EMA near $75.43 is the initial resistance on the upside. The metal will probably continue to be exposed to selling on rebounds until that barrier is regained. Looking down, the current drop in the price of silver may continue until it reaches the low of $68.28 on April 7.