SILVER PRICE FORECAST: XAG/USD STRUGGLES TO EXTEND GAINS ABOVE $22.60 AHEAD OF FED POLICY

Silver price (XAG/USD) is juggling in a narrow range below $22.60 in the Tokyo session. The white metal recovered after a correction from $22.20 but failed to extend recovery as investors are uncertain about Wednesday’s interest rate decision by the Federal Reserve (Fed). Amid rising fears of banking turmoil, investors have turned skeptical about whether the Fed would continue hiking rates further or choose silence this time.

A recovery move by S&P500 indicates that investors have started digesting the volatility linked to the banking fiasco. S&P500 futures have extended gains further, portraying further improvement in the risk appetite of the market participants. It seems that investors have cheered liquidity assistance from various financial institutions, which have come forward to provide support to the First Republic Bank.

The US Dollar Index (DXY) has continued to remain choppy around 103.33 as investors have sidelined ahead of the Fed’s monetary policy. Analysts at ING believe “We do not expect too much volatility if conditions allow the Fed to hike 25 bps and the dot plots do not surprise too much and an unlikely 50 bps hike would be very bullish for the Dollar.”