Silver: Fed Tightens Its Tone as Price Returns to the Volume Profile Zone

Silver came under pressure following the Federal Reserve’s June meeting, at which policymakers kept interest rates unchanged at 3.50–3.75%. Nine of the 18 committee members still see the possibility of a rate increase this year, reinforcing expectations of further monetary tightening. The prospect of rising real yields reduces the appeal of non-interest-bearing assets such as precious metals. An additional restraining factor is geopolitical uncertainty: the Fed noted that inflation remains elevated relative to its 2% target, partly due to supply-side price shocks in the energy sector stemming from the conflict in the Middle East.

Technical Picture

On the four-hour chart of XAGUSD, a bearish trend structure can be identified. Following an attempted breakout and a gap on 15 June, the price encountered resistance near $71.54, after which it declined into the current volume profile area.

The upper boundary of the profile at $68.24 was eventually breached following an initial reaction to the level. The price is currently testing the control zone at $64.306–$64.492 from above, an area that coincides with the consolidation range formed near the end of the previous downward move.

The lower boundary of the profile at $63.411 adds further significance to the POC area, as it lies in close proximity. Below this cluster sits support at $61.54, which could act as an obstacle should the price break lower out of the profile. Current vertical volume readings remain moderate and do not indicate clear dominance by either side of the market. RSI + MAs: 41, 39, 44 — the indicator readings remain below the neutrality zone, while its moving averages are coloured red but continue to move sideways.

Key Takeaways

The technical profile remains cautious: RSI is below the neutrality zone, while trading volume remains moderate and does not yet support a directional move. Federal Reserve rhetoric may prove to be the key driver in the short term. Any softening in the central bank’s tone regarding the future path of interest rates could alter the balance of power around current price levels.

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