Silver (XAG/USD) traded in a tight range in the Asian session on Wednesday. It was near $79.35 and little changed on the day, as traders awaited the FOMC rate decision.
The rising trend line from $66.65 was broken near $83.45, pointing to higher downside risk. Price also sits below the rising 200-period SMA on the 4-hour chart near $83.00.
The MACD moved back towards the zero line and signal line, with only small positive readings. The RSI is near 38, below the 50 level.
Resistance is seen around $83.00–$83.50, where the broken trend line and the 200-period SMA meet. A move above that area could target the mid-$86.00 zone.
Support is near $79.00, with further support around $78.00. A break below $78.00 may open a move towards the mid-$76.00 area.
The technical analysis for this report was produced with help from an AI tool.
Given the upcoming FOMC decision, we are seeing silver consolidate around the $79.35 level with a clear bearish tilt. Recent economic data supports this cautious stance, as last week’s February Consumer Price Index (CPI) came in slightly hot at 3.4%, and the latest jobs report showed a robust addition of 250,000 non-farm payrolls. These figures suggest the Federal Reserve may maintain a hawkish tone, which would strengthen the dollar and pressure silver prices.
For those anticipating a downside move, purchasing put options with a strike price near $78.00 could be a viable strategy to capitalize on a break of the current support. Selling call credit spreads with the short leg above the major resistance at $83.50 offers another way to profit if silver remains capped below this key technical ceiling. This approach benefits from both a drop in price and time decay leading into the post-FOMC environment.
On the other hand, if we believe the Fed might surprise with a more dovish statement, the current consolidation offers an opportunity to position for a rally. Buying call options or initiating bull call spreads upon a confirmed break above the $83.50 resistance zone would be a tactical approach. Such a move would invalidate the recent breakdown and could signal a resumption of the broader uptrend we saw develop during 2025.
The immediate uncertainty surrounding the FOMC announcement makes this an ideal setup for a volatility play. A long straddle, involving the simultaneous purchase of an at-the-money call and put option, would profit from a significant price swing in either direction following the rate decision. This strategy is best employed if you expect a sharp move but are unsure of the ultimate direction.
Looking back, we remember the strong rally silver experienced from the low $60s to over $85 throughout the second half of 2025, which was fueled by expectations of rate cuts. The current weakness is a direct challenge to that narrative, further evidenced by recent outflows from silver ETFs, which have seen a net reduction of over 1.5 million ounces in the past two weeks. Meanwhile, the latest ISM Manufacturing PMI of 49.5 indicates slightly contracting industrial activity, creating mixed signals for silver’s industrial demand component.
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