Profit-taking intensified ahead of the Fed's decision, causing silver to fall below $70 as it awaits policy signals.
2026-06-16 15:22:22
Spot silver (XAG/USD) continued its pullback during Tuesday's European trading session, trading around $69.85. After reaching a recent high, the market entered a profit-taking phase. With the Federal Reserve's latest interest rate decision imminent, investor sentiment is generally cautious, and the precious metals market lacks new catalysts for short-term gains.
The market expects the Federal Reserve to maintain the federal funds rate at 3.50% to 3.75% at its monetary policy meeting this week. As the first major policy meeting chaired by new Chairman Kevin Warsh, investors will focus on his latest assessments of future inflation trends, economic growth, and the path of interest rates. If the Fed releases dovish signals, the dollar and US Treasury yields may fall further, thus providing support for non-interest-bearing assets, including silver.
Meanwhile, the US and Iran reached a preliminary peace framework agreement, significantly easing tensions in the Middle East and reducing the inflationary risks caused by previous energy supply disruptions. However, due to uncertainties surrounding the final agreement and the specific arrangements for the full resumption of normal navigation in the Strait of Hormuz, the market remains cautious, which helps limit the short-term decline in silver prices.
According to the CME Group's FedWatch tool, market bets on further interest rate hikes by the Federal Reserve have declined significantly, with traders expecting a December rate hike probability to drop from nearly 70% to about 58%. This cooling of interest rate expectations lowers the opportunity cost of holding precious metals, providing some support for silver during the correction.
Overall, silver's current price movement is influenced by expectations of Federal Reserve policy, the performance of the US dollar, and market risk sentiment. Although geopolitical safe-haven demand has decreased, expectations of further interest rate hikes and declining real yields may still provide support for silver's future price movements.
From a daily chart perspective, spot silver remains in a clear correction phase, with prices consistently trading below both the 20-day and 100-day Bollinger Bands, indicating that the medium-term downtrend has not yet changed. The Relative Strength Index (RSI) is near 50, suggesting downward momentum exists but has not yet entered extreme oversold territory. The first resistance level to watch is around $72.30; a break above this level could lead to a further test of the $7400 high, followed by a strong resistance zone between $78.55 and $80.72. Key support lies around $63.80; a break below this area could extend the correction further.
From a 4-hour chart perspective, silver has retreated from its weekly high, entering a consolidation phase. Short-term moving averages are flattening, indicating a gradual balance between bullish and bearish forces. Technical indicators show that bearish momentum has strengthened, but no signals of accelerated decline have yet emerged. If the price can regain a foothold above $72.25, a short-term rebound is possible; if it continues to be pressured below this level, it may continue towards the support zone of $66 to $63.80.
Editor's Summary : The short-term pullback in silver was mainly driven by profit-taking and market caution ahead of the Fed's decision. While the US-Iran peace framework agreement alleviated some safe-haven demand, it also lowered market expectations for further interest rate hikes, providing some support for precious metals. The future direction of silver will still depend on the Fed's policy statement, Kevin Warsh's speech, and changes in the US dollar and US Treasury yields. Until key resistance levels are broken, silver will remain in a weak consolidation phase, and investors should pay attention to the volatility risks brought about by policy events.
The market expects the Federal Reserve to maintain the federal funds rate at 3.50% to 3.75% at its monetary policy meeting this week. As the first major policy meeting chaired by new Chairman Kevin Warsh, investors will focus on his latest assessments of future inflation trends, economic growth, and the path of interest rates. If the Fed releases dovish signals, the dollar and US Treasury yields may fall further, thus providing support for non-interest-bearing assets, including silver.
Meanwhile, the US and Iran reached a preliminary peace framework agreement, significantly easing tensions in the Middle East and reducing the inflationary risks caused by previous energy supply disruptions. However, due to uncertainties surrounding the final agreement and the specific arrangements for the full resumption of normal navigation in the Strait of Hormuz, the market remains cautious, which helps limit the short-term decline in silver prices.
According to the CME Group's FedWatch tool, market bets on further interest rate hikes by the Federal Reserve have declined significantly, with traders expecting a December rate hike probability to drop from nearly 70% to about 58%. This cooling of interest rate expectations lowers the opportunity cost of holding precious metals, providing some support for silver during the correction.
Overall, silver's current price movement is influenced by expectations of Federal Reserve policy, the performance of the US dollar, and market risk sentiment. Although geopolitical safe-haven demand has decreased, expectations of further interest rate hikes and declining real yields may still provide support for silver's future price movements.
From a daily chart perspective, spot silver remains in a clear correction phase, with prices consistently trading below both the 20-day and 100-day Bollinger Bands, indicating that the medium-term downtrend has not yet changed. The Relative Strength Index (RSI) is near 50, suggesting downward momentum exists but has not yet entered extreme oversold territory. The first resistance level to watch is around $72.30; a break above this level could lead to a further test of the $7400 high, followed by a strong resistance zone between $78.55 and $80.72. Key support lies around $63.80; a break below this area could extend the correction further.
From a 4-hour chart perspective, silver has retreated from its weekly high, entering a consolidation phase. Short-term moving averages are flattening, indicating a gradual balance between bullish and bearish forces. Technical indicators show that bearish momentum has strengthened, but no signals of accelerated decline have yet emerged. If the price can regain a foothold above $72.25, a short-term rebound is possible; if it continues to be pressured below this level, it may continue towards the support zone of $66 to $63.80.
Editor's Summary : The short-term pullback in silver was mainly driven by profit-taking and market caution ahead of the Fed's decision. While the US-Iran peace framework agreement alleviated some safe-haven demand, it also lowered market expectations for further interest rate hikes, providing some support for precious metals. The future direction of silver will still depend on the Fed's policy statement, Kevin Warsh's speech, and changes in the US dollar and US Treasury yields. Until key resistance levels are broken, silver will remain in a weak consolidation phase, and investors should pay attention to the volatility risks brought about by policy events.
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