Silver price has made subtle movements on Tuesday morning as investors focus on interest rate decisions from various central banks. Over the course of the week, about 20 central banks are scheduled to present their policy decisions. However, the most influential ones will be those of the US Federal Reserve, Bank of England (BoE), European Central Bank (ECB), and Bank of Japan (BoJ).
In the case of the Fed interest rate decision, which is slated for Wednesday, investors expect an acceleration of its asset-tapering program. This also includes cues on interest rate hikes. A hawkish tone will likely boost the US dollar while exerting pressure on silver price and other precious metals.
The price will also be reacting to the US producer price index (PPI) and retail sales data scheduled for Tuesday and Wednesday respectively. Besides, Wednesday’s Chinese industrial production numbers is bound to impact the market.
Silver price prediction
Silver price has eased after extending Friday’s gains earlier on Monday. Notably, it has been trading within a horizontal channel since the beginning of December. The channel’s upper and lower border are at 22.64 and 21.83 respectively.
At the time of writing, the precious metal was down by 0.42% at 22.23. On a four-hour chart, it is trading below the 50 and 200-day exponential moving averages.
In the short term, I expect silver price to remain within the aforementioned horizontal channel. In particular, it may continue to experience resistance along the 50-day EMA at 22.45. On the downside, the psychological zone of 22.00 will be the key support level to watch out for.
