Key Takeaways:
Silver has traded within a $55-$62 range for weeks, with the Federal Reserve's July 28-29 meeting poised to trigger a breakout.
Silver traded at $59.74 an ounce Monday, up 2.7%, as the Fed's July 28-29 meeting looms as the next catalyst for a breakout from the $55-$62 range.
"Gold and silver went through one of the shakiest weeks of the quarter, pulled in two directions at once," Renisha Chainaini, head of research at Augmont, said. "On one side, worsening tensions in the Middle East kept investors reaching for safe assets. On the other, a sudden and sharp shift in expectations about the Federal Reserve's rate path put a lid on prices."
COMEX silver futures settled at $58.705 an ounce, while spot gold climbed 1.3% to $4,103.99. The US Dollar Index edged up to 101.375, and the 10-year US Treasury yield touched a two-month high of 4.641% last week before easing. Swap markets price about a 36% probability of a 25-basis-point rate increase from the current 3.50%-3.75% range, according to CME FedWatch data. A rate hike or hawkish guidance could strengthen the dollar and pressure precious metals, while a dovish hold could support a rally.
Key Levels to Watch
Silver's support sits at $56.50-$57.00, with a break below $55 potentially pulling prices toward $50 an ounce, Chainaini said. On the upside, resistance at $61.50-$63.00 must clear for a run toward $70-$71. Gold's support lies at $3,950-$4,000, with resistance at $4,150. A sustained move above $4,200 could drive gold toward $4,500, while a drop below $4,000 may trigger a fall to $3,900.
The Fed decision is the week's dominant event, but the July 30 release of US Q2 GDP and June PCE inflation data will provide additional signals on the rate path. Brent crude's 6.5% decline Monday to $85.74 a barrel, following a pause in US-Iran hostilities, has eased near-term inflation fears that had been supporting rate-hike expectations. A sustained decline in oil below $100 would reduce pressure on the Fed, while renewed conflict could quickly restore it.
Silver at $59.74 is roughly 6% below the 52-week high and 8% above the 52-week low, reflecting a market caught between geopolitical risk premiums and monetary policy uncertainty. The next 48 hours will determine which force wins.
This article is for informational purposes only and does not constitute investment advice.
