- Silver regains positive traction following the previous day’s pullback from a one-week high.
- Hawkish Fed expectations favor USD bulls and might cap meaningful upside for XAU/USD.
- The mixed technical setup warrants some caution before positioning for further appreciation.
Silver (XAG/USD) attracts some dip-buyers during the Asian session on Wednesday, reversing a part of the previous day’s retracement slide from the $53.70-$53.75 region, or a one-and-a-half-week top. The white metal currently trades near mid-$52.00s, up around 1.80% for the day, though the upside potential seems limited amid mixed cues.
Tuesday’s hotter-than-expected US consumer inflation figures reaffirmed bets for further policy tightening by the Federal Reserve (Fed). Adding to this, comments from Fed Governor Christopher Waller prompted traders to price in the possibility of a jumbo 50-basis-point (bps) rate hike in December. The hawkish outlook might continue to act as a tailwind for the US Dollar (USD), which, in turn, should act as a headwind for USD-denominated commodities, including the XAG/USD.
From a technical perspective, the commodity keeps a capped tone beneath the 100-period Simple Moving Average (SMA) on the 4-hour chart, at $53.05, and all visible Fibonacci retracement levels of the $71.09-$48.61 decline. Meanwhile, the Relative Strength Index (RSI) at 52.62 sits just above the neutral line, and the Moving Average Convergence Divergence (MACD) remains slightly negative, suggesting that rebounds are vulnerable while the XAG/USD stays below the $53.00 hurdle.
A sustained strength beyond, however, could lift the white metal to the 23.6% Fibo. retracement at $53.92. More meaningful barriers are pegged at the 38.2% level at $57.20 and the 50% retracement at $59.85. On the downside, the next notable support is the cycle low at $48.61, where a break would likely open the door to a deeper corrective phase despite the currently neutral short-term momentum profile.
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