Rise of the U.S. Dollar Pressure: Prices for Silver (XAG/USD) in Precious Metals saw a dramatic decline on Wednesday, falling to their lowest level since August 23rd. This decline occurs while U.S. Treasury yields are rising and the dollar is getting close to a six-month high. The prevailing opinion points to a persistent desire for high interest rates, which is mostly driven by worries about China’s economic situation and global economic expansion. As a result, those who own foreign currencies have limited access to silver, like they have to gold.

Concerns about the market amid economic indicators
After Labour Day, when trade resumed, all eyes were on rising U.S. Treasury yields. Notably, the trajectory of oil prices is up, reigniting concerns over the $100 benchmark. Wall Street is uneasy and believes stocks will struggle to outperform Treasury bonds. The nonfarm payrolls report from last Friday, which showed a peak in unemployment rates since early 2022 and dropping hourly earnings, is the background to current market stress. current report caused a change in investors’ perceptions of inflation and Federal Reserve policies.

Deliberations of the Federal Reserve
A lot of discussion is being made about the upcoming Federal Reserve policy meeting in light of recent economic indications, such as a cooling labour market. Following Governor Christopher Waller’s comments, the majority of market analysts do not expect interest rates to alter. The CME FedWatch tool currently indicates a 93% possibility of rates staying the same. Further tightening may be possible later in the year, depending on the release of upcoming economic data.

Global Economic Decline and the Rise of the US Dollar
Recent studies suggest that the global economy is slowing down, which strengthens the case for the U.S. dollar as a reliable asset rather than precious metals like silver and gold. This opinion was confirmed by a 0.1% decline in holdings in the top gold-backed exchange-traded fund, SPDR Gold Trust.

Silver Outlook: A Warned Story
A pessimistic short-term outlook for silver is predicted by the intersecting factors of rising U.S. interest rates, rising Treasury bond yields, and a strong U.S. dollar. In addition to looming governmental changes, the higher opportunity costs of holding stubborn silver solidify the pessimistic outlook for this precious metal.

Technical Analysis
The 200-4H and 50-4H moving averages are below the current Silver price of 23.41, indicating a bearish trend. The 14-4H RSI is oversold at 30.74, indicating that the bearish trend may have peaked. Although there is still room until it reaches the primary resistance, the price is still above the key support zone. On a 4-hour chart, there are no minor supports or resistance levels, which suggests a bearish outlook for Silver.

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