Silver Price Forecast: XAG/USD struggles around 20-day EMA as Fed to hold rates steady for longer

Silver price (XAG/USD) trades flat at around $73.70 during the European trading session on Friday. The white metal consolidates as investors await clarity on the United States (US) interest rate outlook, for which investors will focus on speeches from Federal Reserve (Fed) officials who are allowed to speak on the monetary policy, following the completion of the blackout period after the policy announcement on Wednesday.

In the policy meeting, the Fed decided to leave interest rates unchanged in the range of 3.50%-3.75%, as expected. Fed Chair Jerome Powell stated in the press conference that four members of the rate-setting committee dissented from the hold decision, of which three called for a move away from the easing bias.

Currently, the CME FedWatch tool shows that the Fed will hold interest rates steady at their current levels by the year-end.

Theoretically, the Fed maintaining the status quo for longer limits the upside in non-yielding assets, such as Silver.

Meanwhile, de-anchored global inflation expectations due to higher energy prices in the wake of Middle East conflicts, a scenario that discourages central banks from easing monetary conditions, are likely to keep the Silver price under pressure.

In the European trade, the WTI Oil price trades 0.5% higher above $103 due to the prolonged closure of the Strait of Hormuz, a vital passage to almost 20% of global energy supply.