Federal Reserve policy is putting pressure on silver
The Federal Reserve’s 2025 outlook projects only two 25 basis point rate cuts, indicating a conservative stance that has weighed on silver prices. Despite resilient economic data and falling unemployment claims, higher interest rates continue to pressure the metal. This policy backdrop is consistent with silver’s decline from recent highs and the struggle to hold key technical levels.
Consumer spending and industrial demand are sending mixed signals
Consumer spending rose 0.4% in November, led by a 0.7% increase in goods purchases, including motor vehicles and recreational products. While this reflects robust current economic activity, a declining personal savings rate of 4.4% raises concerns about future constraints. Demand for industrial silver, closely tied to consumer trends, remains vulnerable to these economic shifts.
Short-term outlook: Silver faces continued resistance
The short-term outlook for silver appears bearish. Prices remain below the crucial 200-day moving average of $29.64, with further downside risk if this level is not regained. Moderate inflation rates, persistent interest rate pressure and technical glitches create significant headwinds. While industrial demand may provide some support, resistance at $30 and the 50-day moving average at $31.54 limit recovery potential unless monetary policy signals soften decisively.
More information in our Economic Calendar.