Silver clings to $63 support as hawkish Fed and surging oil weigh

FUNDAMENTAL OVERVIEW

Silver posted a surprisingly strong performance on Friday, gaining ground even after a hotter-than-expected US monthly core inflation print. The move was unusual because the data reinforced expectations that the Federal Reserve will raise rates, with markets now pricing in an 87% chance of a 25-basis-point increase at the next meeting.

The wider environment continues to be negative for precious metals. Oil prices climbing past $100 have prompted a hawkish repricing across asset classes, sending real yields higher. Under normal conditions, such a mix creates substantial headwinds for silver. Despite that, the metal has managed to remain above the critical $63.00 support area.

The next significant event arrives on Wednesday with the FOMC announcement. A 25-bp hike is broadly expected and would be the Fed's first rate increase since 2023. The greater danger for silver is therefore not the rate move itself but the dot-plot projections and the tone of the accompanying statement. Any hawkish deviation could push real yields still higher and place fresh downward pressure on the metal.

Meanwhile, events in the Middle East remain a central focus. Soaring oil prices have been the principal force driving financial markets, notably through their effect on inflation expectations. A reduction in tensions could therefore produce the opposite outcome, dragging oil lower and prompting an unwinding of some of the more aggressive rate-hike bets. That scenario would likely offer some support for silver.

For now, the fundamental picture seems tilted to the downside. Silver would probably need either a dovish Fed or a clear easing in Middle East tensions that pulls oil lower to alter the current landscape. Until then, the mix of elevated oil, higher real yields and tighter financial conditions remains a difficult setting for precious metals.

SILVER TECHNICAL ANALYSIS – DAILY TIMEFRAME

On the daily chart, silver is trading at the key 63.00 support region. That is where buyers might be expected to step in with a defined risk beneath the support to position for a move up to the 71.55 resistance. Sellers, by contrast, will be looking for a break lower to build bearish bets with the next target at 55.00.

SILVER TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME

On the 4-hour chart, a downward trendline now defines the bearish structure. If a pullback reaches the trendline, sellers could be expected to lean on it with a defined risk above it, aiming for a break below the support. Buyers, meanwhile, will want to see the price clear the trendline to boost bullish bets toward the 71.55 resistance.

SILVER TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME

On the 1-hour chart, a minor downward trendline defines the bearish momentum at this timeframe. Sellers will likely continue to press against the trendline with a defined risk above it to push for new lows. Buyers, conversely, will look for a break to pile in for new highs, with the swing high near the 65.00 level as the initial target. The red lines mark the average daily range for today.

UPCOMING CATALYSTS

On Wednesday, the FOMC rate decision is scheduled. US Jobless Claims data follows on Thursday. Traders will also continue to monitor developments in the Middle East closely.