- Silver price remains near $29.50 in a thinly traded market, as the US Dollar and bond yields end the year on a strong footing.
- The Federal Reserve projects the federal funds rate to reach 3.9% by the close of 2025.
- Robust US economic growth prospects have led the Fed to signal fewer interest rate cuts for the coming year.
Silver (XAG/USD) holds near Friday’s low around $29.50 in thin pre-New Year trading on Monday. The precious metal faces selling pressure as the US Dollar (USD) outlook remains firm, supported by expectations of a moderate policy-easing cycle by the Federal Reserve (Fed) in 2025, keeping US Treasury yields elevated.
While 10-year US Treasury yields have dipped 0.5% in Monday’s European session, they remain nearly 15% higher year-to-date, hovering near 4.60%. Similarly, the US Dollar Index (DXY), which measures the Greenback’s strength against six major currencies, edges lower but stays range-bound around 108.00.
The Fed’s cautious stance, as highlighted in its latest dot plot, reflects policymakers’ projection of the federal funds rate reaching 3.9% by the end of 2025. This shift from a dovish to a cautious approach stems from optimism about US economic growth and a slower-than-expected disinflation process in recent months.
This week, investors will closely monitor the US ISM Manufacturing PMI for December, due Friday, which is expected to register at 48.3, slightly below November’s 48.4, signaling a marginally faster contraction in manufacturing output.
Silver Technical Analysis
Silver remains below the upward-sloping trendline that broke near $30.00, drawn from the February 29 low of $22.30 on the daily chart. The price hovers around the 200-day Exponential Moving Average (EMA), indicating an uncertain long-term outlook.
The 14-day Relative Strength Index (RSI) has fallen into the 20.00-40.00 range, suggesting bearish momentum could intensify if it sustains there.
Key support lies at the September low of $27.75, while resistance is seen at the 50-day EMA near $30.90. A breakout in either direction may define the next major move for Silver.
Sliver daily chart
