Silver Weakens Amid Rate Hike Concerns; XAGUSDT Struggles Below Key Resistance

Silver prices dropped for the third day in a row on Friday, trading around $63.60 during Asian hours. The main pressure comes from the Federal Reserve, where a more aggressive stance on interest rates is making non-yielding assets like silver less attractive to investors.

While the Fed kept interest rates at 3.5%–3.75% this week, the tone was far from neutral. In his first meeting as Chair, Kevin Warsh made it clear that fighting inflation is the top priority. This signaled to the market that rates will likely stay high for a while. Some officials even suggested that more rate hikes could happen later this year. This outlook has strengthened the US Dollar and pushed up Treasury yields, both of which usually weigh on precious metals.

Geopolitical risks have eased slightly after the United States and Iran signed a preliminary agreement to reduce hostilities. This deal has started a negotiation process aimed at long-term regional stability. Additionally, the reopening of Iranian ports near the Strait of Hormuz has calmed fears about energy supply chains. As more oil is expected to enter the market, energy prices have dropped, which has also helped lower general inflation concerns. However, most traders are staying cautious because it will take time for shipping and energy flows to return to normal.

Looking at the charts, silver remains in a clear downtrend on the 4-hour timeframe, marked by a pattern of lower highs and lower lows. While buyers managed to hold the support level between 61.28 and 62.52, the subsequent bounce was weak. This suggests there isn't much confidence in a price recovery right now.

For silver to show real strength, it first needs to break above resistance at 69.12. If it clears that, it could move toward the 70.92–73.18 range. However, the overall trend would only shift to positive if the price manages to climb back above the 77.09–78.89 area.

Current momentum appears to be shifting back in favor of sellers. The most important level to watch is the 61.28–62.52 support zone. If silver stays above this, we might see more sideways trading or a small bounce. If it breaks below this level, further price drops are likely.

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