Yahoo Finance Silver Prices Rebound as Markets Digest Fed Rate Cut
Silver has posted gains on Thursday rebounding from the losses seen on Wednesday. Early in the North session, the metal is trading at $17.87, up $0.20, or 1.1% on the day.
Fed Trims Rate as “Insurance”
As expected, the Federal Reserve cut the benchmark rate by a 1/4% on Wednesday. What was somewhat surprising, however, was the hawkish message to the markets from Jerome Powell. Often when the Fed lower rates, policymakers follow up with a pessimistic view of the economy. This time, however, the message was one of cautious optimism. The Fed Chair said that domestic economic conditions were “favorable”, and the rate cut was intended to provide “insurance against ongoing risks”. Powell left the door open for further rate cuts, saying the Fed would cut rates if the economy weakened. With the rate cut, the dollar has become less attractive to investors and silver has capitalized with some gains.
Technical Analysis
Silver has posted gains on Thursday, but the round number of 18.00 remains resilient in resistance. Will the pair test this line in the North American session? Traders should keep an eye on this pesky line. Above, there is major resistance at 18.50. If silver can rally past this level, it would have room to make a run at $20.00, a psychologically significant level. On the downside, there is immediate support at $17.50. This is followed by support at $17.00, which has held since August 23.
This article was originally posted on FX Empire
