XAG/USD holds above $52.67 as the dollar eases. Traders focus on Fed rhetoric rather than the expected rate hold.

Silver (XAG/USD) is trading sideways on Wednesday, consolidating modest losses while market participants await the Federal Reserve's monetary policy announcement scheduled for 18:00 GMT. The white metal is currently hovering around $54.10, down 0.57% on the day, but has managed to stay above the fresh year-to-date low of $52.67 recorded on Tuesday. A slight retreat in the US Dollar has helped limit further downside pressure on the precious metal.

Fed rhetoric drives market sentiment

Attention is shifting from the interest rate decision itself to the accompanying policy outlook. With policymakers widely expected to hold rates steady at 3.75%-4.00% following the September hike, the focus is on signals regarding future moves. Inflation risks remain tilted to the upside due to higher energy costs linked to Middle East tensions, keeping the Fed committed to its 2% target. Any hints of further tightening could strengthen the US Dollar and increase the opportunity cost of holding non-yielding silver, whereas a softer tone might support a recovery in the metal's price.

Technical structure remains bearish

On the 4-hour chart, XAG/USD continues to trade within a descending channel. The price remains below the 50, 100, and 200-period Simple Moving Averages (SMAs), reinforcing a bearish near-term outlook. Although the MACD has turned positive, suggesting some consolidation, the Relative Strength Index (RSI) sits around 44, indicating subdued buying momentum. Traders are watching for a break above the $55.00 resistance and the 50-period SMA at $55.58 to alleviate immediate pressure. Conversely, a drop below the $52.00-$52.50 support zone could expose the metal to further declines toward the $50.00 level.

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This article is compiled from international market news for information only. It is not investment advice.