FOMC personnel adjustments are imminent. How can silver seize the opportunity?
2025-08-06 16:50:32
During the European session on Wednesday (August 6), spot silver (XAG/USD) remained consolidating below the $38.00 mark, continuing the previous day's modest rebound. Earlier, silver retreated from a high of $39.504, hitting a low near $36.200 before stabilizing and rebounding. It currently remains above the middle Bollinger Band. Market attention is focused on personnel changes within the Federal Open Market Committee (FOMC) and expectations of upcoming tariffs from the Trump administration, which could trigger further volatility in market sentiment.
As a typical non-yielding asset, silver's price movements are highly sensitive to interest rate expectations and macroeconomic policy signals. Recent personnel developments in the US political landscape have drawn market attention. This week, US President Trump confirmed his nomination of a new member to the FOMC, replacing Fed Governor Adriana Kugler, who resigned last week. The market generally believes Trump will recommend a candidate with a more accommodative stance, thereby pushing the Fed to restart its rate-cutting cycle.
Furthermore, Trump revealed in a media interview that he has narrowed his Federal Reserve Chair candidate list to four, including White House economic advisor Kevin Hassett and former Federal Reserve Governor Kevin Warsh. This strongly signals a policy shift. Given Trump's consistent criticism of current interest rate policies, analysts believe that if these "dovish" candidates ultimately take the FOMC, the probability of a rate cut will increase significantly, which would be structurally positive for silver.
Meanwhile, Trump's recent mention of a new round of tariffs on the "semiconductor, chip, and pharmaceutical industries" has fueled increased risk aversion in the market. While the equity market is still rebounding, the relative appeal of safe-haven assets has increased, with both gold and silver attracting safe-haven funds.
The daily chart shows silver is currently in a consolidation phase following a short-term correction. The Bollinger Bands indicate that the middle band is at $37.696, and the price has rebounded above it, indicating that short-term support is gradually consolidating. The upper and lower Bollinger Bands are at $39.426 and $35.965, respectively, and the bands are beginning to converge, reflecting the current contraction in volatility, potentially accumulating momentum for the next directional move.
The MACD indicator shows that the double lines are above the zero axis but in a dead cross state, and the MACD histogram shows signs of shortening after experiencing consecutive green columns, suggesting that the short-selling momentum is weakening. If the subsequent DIFF line crosses the DEA line upward, it is expected to form a technical rebound signal.
The RSI indicator remains at 54, slightly above the neutral zone, suggesting that market sentiment has not yet entered the overbought or oversold range. Overall, the analysis shows that after the price stabilized at the $36,200 support area, the technical structure has gradually stabilized. If it can effectively hold the middle Bollinger band in the short term, it may once again hit the $38,800 resistance area.
Market sentiment is currently in a state of oscillation between bulls and bears. On the one hand, policy expectations are leaning toward easing, coupled with the increased risk aversion triggered by Trump's remarks, driving silver back into the spotlight. On the other hand, the resilience of the equity market and the wait for policy implementation have prevented a unanimous market consensus from forming.
Technical indicators suggest that the short-term correction may be nearing its end, with the key support level of $36,200 effectively confirmed, which is crucial for the restoration of bullish sentiment. Meanwhile, the reversal of the RSI and MACD divergences also reflects the phased balance of forces between bulls and bears.
It's worth noting that despite the positive macroeconomic outlook, the market remains cautious between policy expectations and policy implementation. Any unexpected divergence in Trump's personnel decisions or tariffs could lead to significant market volatility. Therefore, the market is currently highly sensitive, and sentiment is easily triggered by new catalysts.
Short-term outlook:
Analysts believe that if the silver price continues to stabilize above the middle track of the Bollinger band and completes an effective backtest confirmation of around $38,000, the short-term market is expected to restart the rebound trend, and the target area will point to $38,800 and $39.504; but if it falls below the key support of $36,200, the callback space may expand to $35.965 (the lower track of the Bollinger band).
Long-term outlook:
From a medium- to long-term perspective, analysts believe that if the Federal Reserve restarts the easing cycle due to political pressure, it will provide sustained support for precious metals; against this background, silver may start a new round of bullish trend and challenge the higher target area above $40; relatively speaking, if inflation remains mild and policies fail to be implemented, market enthusiasm may ebb, and silver will also enter a wide range of fluctuations or a volatile downward phase.
Fundamentals
As a typical non-yielding asset, silver's price movements are highly sensitive to interest rate expectations and macroeconomic policy signals. Recent personnel developments in the US political landscape have drawn market attention. This week, US President Trump confirmed his nomination of a new member to the FOMC, replacing Fed Governor Adriana Kugler, who resigned last week. The market generally believes Trump will recommend a candidate with a more accommodative stance, thereby pushing the Fed to restart its rate-cutting cycle.
Furthermore, Trump revealed in a media interview that he has narrowed his Federal Reserve Chair candidate list to four, including White House economic advisor Kevin Hassett and former Federal Reserve Governor Kevin Warsh. This strongly signals a policy shift. Given Trump's consistent criticism of current interest rate policies, analysts believe that if these "dovish" candidates ultimately take the FOMC, the probability of a rate cut will increase significantly, which would be structurally positive for silver.
Meanwhile, Trump's recent mention of a new round of tariffs on the "semiconductor, chip, and pharmaceutical industries" has fueled increased risk aversion in the market. While the equity market is still rebounding, the relative appeal of safe-haven assets has increased, with both gold and silver attracting safe-haven funds.
Technical aspects:
The daily chart shows silver is currently in a consolidation phase following a short-term correction. The Bollinger Bands indicate that the middle band is at $37.696, and the price has rebounded above it, indicating that short-term support is gradually consolidating. The upper and lower Bollinger Bands are at $39.426 and $35.965, respectively, and the bands are beginning to converge, reflecting the current contraction in volatility, potentially accumulating momentum for the next directional move.
The MACD indicator shows that the double lines are above the zero axis but in a dead cross state, and the MACD histogram shows signs of shortening after experiencing consecutive green columns, suggesting that the short-selling momentum is weakening. If the subsequent DIFF line crosses the DEA line upward, it is expected to form a technical rebound signal.
The RSI indicator remains at 54, slightly above the neutral zone, suggesting that market sentiment has not yet entered the overbought or oversold range. Overall, the analysis shows that after the price stabilized at the $36,200 support area, the technical structure has gradually stabilized. If it can effectively hold the middle Bollinger band in the short term, it may once again hit the $38,800 resistance area.
Market sentiment observation:
Market sentiment is currently in a state of oscillation between bulls and bears. On the one hand, policy expectations are leaning toward easing, coupled with the increased risk aversion triggered by Trump's remarks, driving silver back into the spotlight. On the other hand, the resilience of the equity market and the wait for policy implementation have prevented a unanimous market consensus from forming.
Technical indicators suggest that the short-term correction may be nearing its end, with the key support level of $36,200 effectively confirmed, which is crucial for the restoration of bullish sentiment. Meanwhile, the reversal of the RSI and MACD divergences also reflects the phased balance of forces between bulls and bears.
It's worth noting that despite the positive macroeconomic outlook, the market remains cautious between policy expectations and policy implementation. Any unexpected divergence in Trump's personnel decisions or tariffs could lead to significant market volatility. Therefore, the market is currently highly sensitive, and sentiment is easily triggered by new catalysts.
Market outlook:
Short-term outlook:
Analysts believe that if the silver price continues to stabilize above the middle track of the Bollinger band and completes an effective backtest confirmation of around $38,000, the short-term market is expected to restart the rebound trend, and the target area will point to $38,800 and $39.504; but if it falls below the key support of $36,200, the callback space may expand to $35.965 (the lower track of the Bollinger band).
Long-term outlook:
From a medium- to long-term perspective, analysts believe that if the Federal Reserve restarts the easing cycle due to political pressure, it will provide sustained support for precious metals; against this background, silver may start a new round of bullish trend and challenge the higher target area above $40; relatively speaking, if inflation remains mild and policies fail to be implemented, market enthusiasm may ebb, and silver will also enter a wide range of fluctuations or a volatile downward phase.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
