FX.co ★ Skull999 | XAG/USD, SILVER

Silver Daily Forecast Silver (XAG/USD) rebounded from the fresh YTD low of $52.67 hit during Tuesday's Asian session. Easing crude oil prices provided some support due to ongoing diplomatic negotiations aimed at easing tensions in the Middle East. Currently, XAG/USD is trading at $54.50, up 0.96% for the day. Nevertheless, a strong USD is curbing upside ahead of Wednesday's FOMC policy statement. The USD Index (DXY), which tracks the greenback's performance against a basket of six major currencies, is hovering at $102.23, near its two-week high. According to strategists at BNY Markets, the Fed may choose not to act this week at the October FOMC meeting, in line with market expectations. "There is no expectation of any interest rate hikes during the October FOMC meeting tomorrow. We prefer to look toward the December meeting," they state. Additionally, they add, "Considering the Fed rhetoric and stable but persistently high levels of inflation, the weight does not seem to lie on the hawkish side." As expectations of inaction prevail, market participants will watch the Fed's policy statement and comments from Chairman Kevin Warsh. Higher interest rates usually hurt silver because it doesn't pay dividends. Therefore, a dovish bias could benefit silver, while a hawkish tone may further weaken the metal. On the XAG/USD daily chart, the pair formed new lower highs and lower lows after peaking near $70 toward the end of August. Technically, the metal remains below both the 100-day and 200-day SMAs. Accordingly, the RSI reading near 34 signals an oversold market but is still far from extreme oversold territory below 30. Meanwhile, the MACD line below zero, with reduced momentum, indicates downside risk in the coming period. With this outlook, we could see a prolonged downward corrective wave. Immediate resistance levels appear to stand near the current $55 horizontal level. In an upside scenario, bulls could face resistance near the psychological $60 level, followed by the $62 100-day SMA. Beyond those areas, the $65 horizontal line and the $71 200-day SMA would be key levels where sellers must regain control to reverse the trend back up. Conversely, a break below the recent Monday low near $52.67 would expose the psychological support zone at $50.00. Such a breakout would create downside opportunities in silver.