The price of silver inched higher on Wednesday, increasing the value of white metal to more than $13.80 an ounce. The technical bias however remains extremely bearish because of a Lower Low in the recent downside move as the precious metal hovers at historic lows.
As of this writing, the metal is being traded around $13.81. A support can be noted near $13.62, the swing low of the recent downside move ahead of $13.00, the psychological number.
On the upside, the white metal is likely to face a hurdle near $14.00, the psychological level ahead of $14.26, the 23.6% fib level and then $14.66, the 38.2% fib level. The technical bias will remain bearish as long as the $14.62 resistance area is intact.
Fed Monetary Policy
The Federal Reserve is expected to announce a hike in interest rates when its two-day policy setting meeting ends later in the day. It would be the first U.S. rate hike in nearly a decade, signaling the beginning of an end to an expansionary monetary policy that has supplied a tidal wave of liquidity to risk asset markets globally.
With a hike seen as a mostly done deal after more than a year of anticipation, investor focus is fixed on how the Fed might opt to pace its tightening cycle next year. The central bank has hinted that it intends to hike rates gradually.
Considering the overall technical and fundamental outlook, buying the precious metal could be a good strategy if we get a valid bullish reversal candle such as bullish pin bar or bullish engulfing candle.
* FXOpen International, Innovative Broker of 2022, according to the IAFT
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.