Silver Price Forecast: XAG/USD remains vulnerable near $60

Silver (XAG/USD) remains vulnerable near $60 on Wednesday, as traders lower expectations for another Fed rate hike in October after weaker-than-anticipated US PCE inflation data. The metal currently trades around $60.38, poised to close September with a nearly 9% loss. Although the inflation data initially buoyed the metal by pushing the US Dollar and Treasury yields lower, this brief uptick was short-lived due to robust GDP and ADP employment figures indicating a resilient US economy.

These positive economic indicators maintain hopes that the Fed could still raise rates later in the year, as policymakers remain committed to bringing inflation back to their 2% target. Consequently, hawkish Fed expectations continue to support the US Dollar and Treasury yields, putting downward pressure on non-yielding assets like Silver, which generally perform better when borrowing costs are low.

Focus now shifts to the US ISM Manufacturing PMI on Thursday and the Nonfarm Payrolls report on Friday for additional insights into the Fed's policy stance. On the daily chart, XAG/USD holds a bearish near-term bias, trading well below key moving averages such as the 50-day, 100-day, and 200-day Simple Moving Averages (SMAs). Momentum supports this downtrend, with the Relative Strength Index (RSI) nearing the lower 40s and the Moving Average Convergence Divergence (MACD) remaining below zero with a negative reading.

The Average Directional Index (ADX) is also low at around 13, signaling a weak but persistent downtrend. The first support lies at the horizontal level near $60, followed by deeper resistance at $55 and the more distant $50 zone. For a potential rebound, the metal must first break above the 50-day SMA at $63, followed by the 100-day SMA at $65, with the $73 200-day SMA acting as a broader bearish barrier for the medium term.