The Silver price (XAG/USD) staged a significant comeback on Wednesday, bouncing back from a four-month low of $26.30 after the release of a disappointing US Manufacturing PMI report.
- Manufacturing PMI Slumps: The ISM Manufacturing PMI fell sharply to 49.2, indicating a contraction in the manufacturing sector. This data point raised concerns about the US economy and pressured the US Dollar.
- Silver Recovers: The weaker Dollar provided support for Silver prices, leading to a strong rebound.
- Fed Meeting Looms Large: However, the main event for investors remains the upcoming Federal Reserve policy decision later today.
Fed’s Stance on Rates Crucial
- The Fed is expected to maintain interest rates but its future guidance on rate cuts will be closely scrutinized.
- The CME FedWatch tool suggests the Fed might favor unwinding its tight monetary policy later this year.
- Investors are particularly interested in whether the Fed will stick to its projections of three rate cuts in 2024.
Silver Technical Analysis: Near-Term Uncertainty
- Silver’s technical outlook remains somewhat uncertain despite the recent rebound.
- The price has fallen below the key 20-period EMA, indicating short-term selling pressure.
- A crucial support level to watch is the horizontal support around $26.09.
- The long-term outlook for Silver is still considered stable by some analysts.
