Silver remained under pressure Tuesday as a firm U.S. dollar and uncertainty over the Federal Reserve’s next move kept buyers cautious. XAG/USD traded near $57.43 at about 2:52 a.m. EDT, while Reuters reported an earlier 2% decline to $57.23 per ounce.
The charts point to weak short-term momentum, although support near $55 could still attract buyers. Meanwhile, a projected supply deficit offers longer-term support as traders prepare for the Fed decision and key U.S. economic data.
Silver Struggles Below $58.30
The four-hour chart shows silver trading below its 50-period exponential moving average at $58.30. That moving average now marks the first barrier for buyers after several failed attempts to hold gains near $59 and $60.
The relative strength index stood near 42, below the neutral 50 level. This reading confirms weak momentum, but it does not show deeply oversold conditions. As a result, silver could continue moving sideways before choosing a clearer direction.
Immediate support sits near the session low of $56.71. A break below that level would shift attention toward the $55 area, where buyers stepped in earlier this month. However, a recovery above $58.30 could open the way toward $59.50 and the psychological $60 mark.
Daily Trend Keeps Sellers in Control
The daily chart presents a more cautious picture. XAG/USD remains well below its 50-day EMA at roughly $63.69, while the daily RSI near 42 shows that sellers still have the upper hand.
Silver must first close above $60 to improve the near-term structure. A stronger reversal would require a move above the $63.70 area, which could then become support. Until that happens, rallies may continue to face selling pressure.
On the downside, a daily close below $55 would weaken the current base and increase the risk of a move toward the low-$50 range.
Dollar Strength and Gold Outperformance Add Pressure
The Dollar Index traded near 101.51, above its 50-period EMA at 101.20. Its RSI near 62 also showed positive momentum. The dollar reached a one-month high as traders raised the probability of a Fed rate increase, making dollar-priced metals more expensive for overseas buyers.
U.S. Dollar Index. Source: TradingView
The gold-silver ratio also climbed to about 70.47, above its 50-day EMA at 66.61. A rising ratio means gold is outperforming silver. A move above 72 could signal further relative weakness in silver, while a drop below 68 would improve the outlook.
Gold-Silver Ratio. Source: TradingView
Fed Decision Could Set the Next Direction
The Fed will announce its policy decision Wednesday, July 29, at 2 p.m. EDT, followed by a press conference at 2:30 p.m. Markets assigned a 62% probability to unchanged rates and a 38% chance of at least a quarter-point increase.
A rate increase or firm policy message could strengthen the dollar and push silver toward $55. In contrast, a hold with softer guidance could help XAG/USD reclaim $58.30 and challenge $60.
Traders will then turn to second-quarter GDP and June PCE inflation data Thursday at 8:30 a.m. EDT.
For now, the silver price outlook remains cautious below $58.30. Holding $55 would preserve the base, while a close above $60 would offer the first meaningful sign that buyers are regaining control.
