• Silver price trades vulnerably near $75.50 as traders expect an extended pause from the Fed.
• The Fed sees monetary policy adjustments as unviable until inflation starts to cool down.
• Middle East conflicts are expected to limit the downside in the Silver price.

Silver price (XAG/USD) struggles to gain ground even after sliding to a fresh monthly low of $75.50 during the late Asian trading session on Thursday. The white metal has come under pressure amid the speculation that the Federal Reserve (Fed) will hold interest rates steady in the current range of 3.50%-3.75% in the entire year.

According to the CME FedWatch tool, the collective odds of the Fed leaving the Federal Fund Rate unchanged and hiking it from its current levels are 57.5%.

The scenario of the Fed holding interest rates at their current levels for longer is theoretically favorable for interest-bearing assets, which eventually diminishes the appeal of non-yielding assets, such as Silver.

As of writing, 10-year US Treasury Yields are 0.42% up to near 4.28%, close to their over six-week high. The US Dollar Index (DXY) is marginally down, but is holding onto Wednesday's gains slightly above 100.00.

Technically, a higher US Dollar makes the Silver price an unfavorable risk-reward bet for investors.

Speculation that the Fed will hold interest rates for a longer period intensified after the Fed’s monetary policy outcome on Wednesday, in which it left interest rates unchanged for the second time in a row, as expected, and signaled that monetary easing is not feasible as risks to inflation are skewed to the upside.

“Inflation remains somewhat elevated, with recent progress slower than hoped,” Fed Chair Jerome Powell said in the press conference and added, “The current policy stance is appropriate and is at the high end of neutral, or mildly restrictive.”

Meanwhile, escalating tensions in the Middle East are expected to limit the downside in the Silver price. Safe-haven assets, such as Silver, tends to perform better in a heightened geopolitically uncertain environment.

Silver technical analysis

In the 4-hour chart, XAG/USD seems to be in a bearish trend after a breakdown of the Descending Triangle chart pattern near $77.50. The shift of the 14-period Relative Strength Index (RSI) into the 20.00-40.00 zone signals the onset of a strong bearish momentum.

Key support areas emerge at the February 17 low around $72.00 and the February 06 low of $64.17, respectively. On the upside, Initial resistance emerges at the recent breakdown zone around $78.00, followed by the $80.00 area where prior lows and the rejected trend-line region converge. A recovery above $80.00 would be needed to ease immediate downside pressure and open the way toward the March 12 high of $87.45.

(The technical analysis of this story was written with the help of an AI tool.)