Silver (XAG/USD) fell by almost 3% to below $73.00 during Tuesday’s European session, trading near $72.90. Selling pressure increased ahead of the Federal Reserve policy decision on Wednesday.
Markets expect the Fed to keep interest rates unchanged at 3.50%–3.75% for a third meeting. The CME FedWatch Tool puts the probability of no change at 76.7%, with the remainder pricing in a cut.
Fed Decision In Focus
Attention is on the policy statement and Chair Jerome Powell’s press conference for clues on the rate path. A modest rebound in the US Dollar also weighed on silver, after Monday’s sharp fall.
The US Dollar Index (DXY) was up 0.25% to about 98.75. A firmer dollar can reduce the appeal of dollar-priced metals.
Silver remains below the 20-day EMA near $76.22, keeping near-term price action biased lower. The RSI is around 42, pointing down and not yet in oversold territory.
Resistance sits at the 20-day EMA near $76.22, with a break potentially targeting $83.06 (April 17 high). Support levels include $68.28 (April 7 low) and a four-month low near $61.
Strategy And Key Levels
We are seeing a familiar pattern develop in the silver market, reminiscent of the setup from last year. In April of 2025, we saw silver prices drop sharply below $73 ahead of a Federal Reserve decision due to uncertainty and a strengthening dollar. Today, with another Fed meeting this week, traders should be preparing for a similar period of caution and potential volatility.
The current economic backdrop adds weight to this cautious outlook, with recent US inflation data for March coming in at a stubborn 2.9%, making the Fed’s path less clear. While the Fed held rates at 3.50%–3.75% during that period last year, they are now at 2.75%–3.00% and markets are split on whether the next move is a cut or another hold. The US Dollar Index is also stronger now than it was then, currently trading above 105, which typically acts as a headwind for silver prices.
Given this environment, traders should consider positioning for downside risk in the immediate short term. Buying put options with a strike price near the $70.00 level could offer protection against a repeat of last year’s price action, where silver tested support around $68.28. We are also seeing a rise in implied volatility in XAG options, which could make strategies like a bear put spread attractive to lower the entry cost.
The key technical levels from that 2025 period remain psychologically important for the market. A failure to hold above the current price of around $72.90 could open the door for a retest of those old support zones. We are therefore watching that four-month low from last year, near $61.00, as a major long-term floor should selling pressure intensify after the Fed announcement.
