US Treasury yields showed limited movement on Thursday after a post-election rally. The yield on ten-year government bonds rose by 2 basis points to 4.449%, while the yield on two-year government bonds fell slightly to 4.262%. Investors remain cautious given inflation concerns linked to possible fiscal expansion, which could prompt the Fed to keep interest rates high over the longer term. Higher interest rates would weigh on precious metals because they increase the opportunity cost of holding non-performing assets.
Economic data in focus for the Fed’s interest rate path
In addition to the Fed’s decision, markets will be closely watching Thursday’s economic data releases, including weekly jobless claims, third-quarter productivity data and September’s wholesale inventory numbers. Indicators pointing to slowing job growth or moderating productivity could support further interest rate cuts. Such a moderate interest rate path would likely stimulate demand for gold and silver as a hedge against potential economic volatility.
Market Forecast: Short-term bullish for silver as resistance is broken
Given current technical and fundamental signals, the near-term outlook for silver appears cautiously bullish. A break above the 50-day moving average at $31.33 could allow a rally towards $32.49. However, the Fed’s interest rate decision and Powell’s comments will be crucial. If silver cannot maintain momentum above the 50-day moving average, a retest of the $30.67 support level remains possible, with potential downside if the Fed takes a more hawkish tone than expected.