Silver falls, testing the $52 Level

Silver is under significant pressure following the Fed’s decision to leave interest rates unchanged at 3.75–4.00%, although two policymakers voted in favor of an immediate rate hike. Markets are increasingly pricing in the possibility of another move in December, further weighing on sentiment across precious metals.

Macroeconomic data are adding to the pressure. US GDP grew at an annualized rate of 3.4% in the third quarter, compared with expectations of 3.2%, while PCE inflation accelerated to 3.6% year-on-year in September. The combination of a resilient economy and rising inflation limits the scope for rate cuts and supports elevated bond yields. This creates an unfavorable environment for non-yielding assets such as precious metals.

Silver is falling more sharply than gold, partly due to its industrial exposure. Prices are reacting not only to interest rate expectations but also to the outlook for global economic activity and commodity demand. In the current volatile environment, deteriorating sentiment could therefore translate into more pronounced price swings.

From a technical perspective, the $52-per-ounce area is now a key level to watch. Holding above this threshold could support stabilization, but a sustained break below it would increase the risk of a deeper correction. As long as US data support expectations of a restrictive monetary policy stance, silver is likely to struggle to regain meaningful upward momentum.

Source: XTB Research