Silver Price Forecast: Can XAG/USD sustain its rebound from the YTD low amid an uncertain outlook?

• Silver recovers towards $54.50 after touching its YTD low of $53.46.
• Elevated oil prices leave Silver’s price outlook clouded by uncertainty.
• Wednesday’s Fed decision is expected to leave interest rates unchanged, according to investors.

Silver (XAG/USD) recovers most of its initial losses in Friday’s early European session, returning to around $54.50. The recovery in the white metal follows a fresh year-to-date (YTD) low near $53.46.

Uncertainty continues to weigh on Silver’s outlook as risks to energy supplies drive oil prices higher. Rising crude prices lift global inflation expectations and, in turn, fuel expectations of higher interest rates from central banks. This reduces the attractiveness of non-yielding assets such as Silver. At the time of writing, WTI Oil is trading above $100, up 1.5%.

Concerns over renewed escalation in Middle East tensions have heightened energy supply risks. Reuters reported that the US State Department this week instructed non-emergency personnel and family members to leave American embassies in Saudi Arabia.

Wednesday’s monetary policy announcement from the Federal Reserve (Fed) will be the next major catalyst for Silver. An unchanged interest rate range of 3.75%-4.00% is considered almost certain. Investors will scrutinise the Fed’s guidance on inflation and the economic outlook.

According to the CME FedWatch tool, the Fed will keep rates unchanged this month before raising them in December.

What Does Silver’s Technical Outlook Indicate?

A bearish short-term bias persists on the daily chart, with XAG/USD trading at $54.29, well beneath its 20-day Exponential Moving Average (EMA) of $58.77. Following its recent decline, the metal continues to face pressure. The Relative Strength Index (14), meanwhile, is close to 32, suggesting that downward momentum remains in place. However, its proximity to oversold territory could temper further losses.

A sustained move above the 20-day EMA at $58.77 would be necessary to soften the prevailing bearish tone, with that level marking the first significant upside resistance. As the supplied dataset offers no nearby structural support levels, traders are likely to monitor the RSI for indications that selling pressure is running out of steam. Nevertheless, the overall technical setup continues to favour sellers as long as XAG/USD remains below this key EMA barrier.

(The technical analysis of this story was written with the help of an AI tool. Know more.)