Silver Price Forecast: XAG/USD Maintains Downward Bias Below $55.00 as Traders Await FOMC

During early European trading on Wednesday, spot silver was trading near $54.08, extending the pullback from the previous session. After an earlier attempt to rebound from multi-month lows, the rally faced fresh selling pressure below the $55 level and failed to hold ground. Investors largely adopted a wait-and-see stance, awaiting the latest monetary policy signals from the Federal Reserve.

**Technical Outlook Points to Lingering Downside Risks**

From a technical standpoint, the short-term outlook for silver leans bearish. The Relative Strength Index (RSI) on the daily chart hovers near the oversold boundary at 31.53, indicating that downside momentum still dominates, though it may be nearing exhaustion rather than initiating a new round of selling. Market analysts suggest caution against further shorting until a sustained break below the $54.00 level is confirmed.

**Key Support and Resistance Levels**

On the downside, if silver decisively loses the $54.00 level, the next support zone to watch is the psychological $50.00 mark. According to TradingKey analysts, a loss of that level could pave the way for a further decline toward the $45 area. On the upside, immediate resistance sits at the $55.50 region; reclaiming that level could alleviate current bearish pressure and open the door for a challenge toward $58.00 and even $60.00.

**Market Focus on Fed Decision**

The core focus for the market remains the Federal Reserve's interest rate decision. According to the CME FedWatch tool, market expectations broadly point to rates being held steady at this meeting, but investors will scrutinize the policy statement and post-meeting communications for clues on the future rate path. Recent oil price gains have intensified inflation concerns, reinforcing expectations that the Fed may hike rates by year-end, which raises the opportunity cost of holding non-yielding assets like silver and pressures the metal's price.