Silver Selloff Intensifies as Fed Policy Shifts

A hawkish turn from the U.S. Federal Reserve has triggered a significant downturn in precious metals, with silver prices experiencing a sharp decline. At one point during the trading session, the metal plummeted by 1.43%, breaching a critical technical support level. What initially appeared to be a routine market correction has rapidly escalated into a full-scale selloff. The psychologically significant $50 per ounce threshold is now under serious threat as bearish sentiment takes hold across the market.

Technical Indicators Flash Warning Signals

The chart outlook for silver has deteriorated substantially, with multiple technical indicators now pointing to further potential losses. Several concerning developments have emerged simultaneously:

• Failed Breakout Attempt: The recent assault on the resistance zone at $54.48 ended in a decisive failure.
• Trend Reversal: The short-term upward trendline has been conclusively broken to the downside.
• EMA50 Resistance: The 50-period exponential moving average has transformed from support into a formidable resistance level.
• Selling Pressure: Any brief price recoveries are being met with immediate selling as investors use rallies as exit opportunities.

Market technicians note with concern that trading activity is now occurring entirely below the EMA50 indicator, reinforcing negative momentum and potentially paving the way for additional declines. While the Relative Strength Index reading of 60.4 indicates silver is not yet in oversold territory, it has moved substantially away from overbought conditions.

Should investors sell immediately? Or is it worth buying Silber Preis?

Federal Reserve Policy Drives Market Sentiment

The primary catalyst for this downturn originated from Washington, where Federal Reserve officials have delivered a sobering message to market participants. Recent commentary suggests a notably more cautious approach toward future interest rate reductions than previously anticipated. The interest rate cut in December, which markets had almost universally priced in, has suddenly become uncertain.

This shift presents a fundamental challenge for non-yielding assets like silver. When interest rates remain higher for longer, precious metals become less attractive to investors who can achieve better returns from interest-bearing assets. The logical consequence is widespread selling pressure as capital rotates out of silver and into alternatives offering superior yield.

Critical $50 Support Level in Jeopardy

Following a low of $49.51, silver managed a modest recovery to approximately $50.26. However, the overall situation remains precarious. The crucial $50 psychological barrier continues to be vulnerable, with market participants anxiously awaiting upcoming U.S. employment data that could provide further clues about the Fed’s policy trajectory. Without a sustainable stabilization above this level, downward pressure on the white metal is likely to persist.