Silver holds steady near $49 amid US fiscal uncertainty, trade truce

Silver (XAG/USD) trades little changed on Friday, hovering around $49 per ounce as investors digest the cautious message from the US Federal Reserve (Fed) and the recent diplomatic progress between the United States (US) and China.

Fed Chair Jerome Powell’s measured tone during Wednesday’s press conference weighed on expectations for further interest rate cuts this year. Powell stated that an additional reduction in December was “not a foregone conclusion,” emphasizing that future policy decisions would depend on incoming economic data. According to the CME FedWatch tool, the chances of a 25-basis-point rate cut in December have fallen to around 67% from more than 90% a week earlier. This cautious stance supported US Treasury yields, with the 10-year yield holding near 4.10%, while keeping the US Dollar (USD) firm.

On the geopolitical front, the meeting between US President Donald Trump and Chinese President Xi Jinping at the APEC Summit in South Korea concluded with a one-year trade truce lasting until November 2026. Under the agreement, Washington will halve its fentanyl-related tariffs, while Beijing will remove duties on several US agricultural products and delay the implementation of rare-earth export restrictions. This temporary easing of tensions reduces market anxiety and limits safe-haven demand for Silver.

Meanwhile, the US government shutdown, now entering its fifth week, continues to fuel political and economic uncertainty. The Senate remains deadlocked, preventing the passage of new funding bills and delaying key economic data releases, which raises concerns about the broader growth outlook.

Silver Technical Analysis: Faces resistance near $49.40 amid potential double-top setup

Silver 4-hour chart. Source: FXStreet

Silver prices are stabilizing just below the $49.40 resistance region, near the previous peak of October 23 at $49.46, forming a potential double-top pattern on the 4-hour chart. A rejection from this resistance zone, signaled by a pullback below the intraday low of $48.69, could trigger a deeper bearish correction and expose the October 28 low at $45.56. A break below this level, which represents the neckline of the double-top formation, would open the door to a more pronounced decline, with a projected target around $41.80.

On the upside, a break above the $49.40 resistance would bring the 100-period Simple Moving Average (SMA) on the 4-hour chart, currently at $50.01, into focus. Further gains could see Silver testing the recent all-time high at $54.86.

The mentioned horizontal SMA and the Relative Strength Index (RSI), which fluctuate between 50 and 70, highlight the absence of a clear short-term trend, although the bias remains slightly tilted to the upside.