Silver Price News: Silver Holds Steady Ahead of Rate Cuts

Silver prices were largely range bound on Tuesday, with the markets apparently in wait-and-see mode ahead of Wednesday’s interest rate decision by the US Fed.

Prices moved a few cents on either side of $30.50 an ounce on Tuesday, compared with around $30.78 an ounce in late trades on Monday.

Markets weigh outlook for monetary policy

The markets are pricing in a 95% chance of a 25-basis-point cut by the US Fed to be announced after the European markets have closed on Wednesday evening. However, the outlook for early 2025 is less clear, as data from interest rate traders indicate that a large majority expect the Fed to keep rates steady at its next meeting on January 29^th. Lower interest rates tend to support gold and silver prices as they reduce the opportunity cost of holding non-interest-bearing investments.

Elsewhere, US industrial production fell by a marginal 0.1% in November, against expectations of a 0.3% increase, and showing the third straight monthly decline, according to figures released on Tuesday, in a bearish sign for industrial demand for silver in the US.

Technical analysis

On the technical charts, silver twice tested the downside at just below $30.00 an ounce on November 14^th and 28^th, providing potential horizontal support at this area in the coming days. Should that level fail, the next potential support zone is provided by ascending oblique major support, currently at $28.48 an ounce. This is the trend line that goes back to March 2024, and which provided a bullish rebound for silver in early August. Conversely, silver’s upside may be limited by rising oblique minor resistance at $31.84 an ounce.

Upcoming events

Beyond the aforementioned US interest rate decision later on Wednesday evening, the market will be looking ahead to Thursday’s interest rate decision by the Bank of England, which is expected to keep rates on hold at 4.75% for the time being. Thursday will also bring figures on the US final GDP growth rate for Q3 and the weekly initial jobless claims for the week ending December 14^th, for an update on the health of the US economy.