Peace be upon you and God’s mercy 🌙
On the night of Wednesday, September 16, the Federal Reserve made a decision that was supposed to deal silver a fatal blow: raising the interest rate by 25 basis points for the first time since July 2023, by unanimous vote 12-0, with a reference to the last hike before the end of the year. The economic logic is clear: higher interest rates raise the opportunity cost of holding non-yielding assets, such as silver. And yet, the exact opposite happened.
Silver crashed to $61.90 immediately after the announcement, then dramatically reversed higher, reaching $66.76 on Friday—recording weekly gains of more than 3%. So what exactly happened? And what awaits the white metal in the coming days?
🎢 1. The Paradox: Why did silver rise despite the Fed raising interest rates?
The answer lies in three simultaneous forces:
First: “Sell the Rumor, Buy the Fact”
The rate hike was fully priced in before the announcement. Investors who bet on a decline closed their positions after the decision was released, triggering a rebound buying wave. This classic pattern explains the sharp reversal from $61.90 to above $65.
Second: bond yields collapse
The U.S. 10-year Treasury yield, which rose above 5% before the decision, fell to 4.93% after the announcement. Lower yields reduce the appeal of bonds and return momentum to silver. According to Societe Generale’s strategists, the bond market “got a helping hand from lower oil and gas prices.”
Third: falling oil prices and cooling inflation fears
Saudi Arabia has started to restore flows in the East-West pipeline line, which pushed Brent crude down below $104. Lower oil = lower inflation = less pressure on the Fed = support for silver.
📊 2. Technical Picture: Where is silver headed?
The technical picture is split between strong bullish signals and stubborn resistance.
Bullish Signals:
🔹 Price is trading above the 50-day moving average ($63) and the 100-day moving average ($66).
🔹 The Relative Strength Index (RSI) at 55–65, above the neutral level of 50, indicating upside momentum without being in an overbought condition.
🔹 The bearish “Head and Shoulders” pattern faces a threat of being exposed if price breaks above $66.56.
Key Resistances:
🔸 First Resistance: $66.56 (100-day average) — breaking it paves the way for $67.
🔸 Second Resistance: $68.11 (Fib 38.2%) — a crucial zone for turning the trend [citation:8].
🔸 Third Resistance: $73.18 (200-day average) — the biggest barrier in the medium term.
Crucial Support:
🔹 First Support: $62.86 (50-day average) — breaking it would restore the bearish scenario [citation:8].
🔹 Second Support: $60.00 — the last psychological level before $55.
What worries technical analysts is the ADX indicator reading at just 12, meaning a “weak trend environment.” The market is moving in a sideways range, and any breakout needs real momentum to last.
⚠️ 3. What should you watch in the coming days?
Chances of a rate hike in October:
According to the CME FedWatch tool, traders are now pricing a 53.1% probability of another hike in October, up from 44% a day earlier. If this scenario plays out, silver may face fresh pressure.
Bond yields:
The question remains: will the 10-year Treasury yield hold above 5%? Any further pullback in yields would support silver, while a return of yields to the upside will weigh on it.
Negotiations with Iran:
A report from Axios said the “United States plans to resume negotiations on Iran with Gulf countries next week.” Any diplomatic progress that lowers oil prices would reflect positively on silver by reducing inflation worries.
Industrial demand:
Silver is not just a safe haven. A report by the World Silver Association indicates that the global silver market has been running a persistent deficit for the sixth consecutive year, with deficit expectations of around 46 million ounces in 2026. This structural shortfall creates a solid price floor over the long term, regardless of fluctuations in monetary policy.
✅️Summary:
Silver held up against the first rate hike in three years—not because the Fed became friendly, but because the hike was expected, yields fell, and oil declined. But the real battle isn’t over yet. $66.56 and $68.11 are the keys to the bullish turn, while $62.86 is the final line of defense. Anyone who understands this equation understands where silver is headed.
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💬 Tonight’s question:
In your opinion, does silver’s resilience against a Fed rate hike signal real strength, or is it merely a temporary rebound before a drop?
Be honest in your comments 👇