Silver prices have dropped $5 from their highs over the past two months but appear to have found a floor around the $30 level. This key support zone, bolstered by the 100-day Simple Moving Average (SMA), has sparked renewed buying interest, positioning the metal for a potential rebound as the Federal Reserve prepares for its final rate decision of 2024.
The escalation of the Ukraine conflict triggered sharp declines across precious metals in November, with gold shedding $350 and silver sliding $5 in just a few weeks. Despite the sell-off, silver has stabilized, forming a base above $30 and maintaining its broader bullish trend of rising lows. A sustained move above $30.60 could signal the start of a recovery, while a break below $30 risks accelerating losses.
Technical Picture: Key Levels to Watch 
Silver’s 100-day SMA has provided critical support, helping the metal stave off deeper declines.
•Resistance: Immediate resistance is seen at $30.60. A break above this level could pave the way toward further gains.
•Support: The $30 mark remains a key psychological and technical barrier. A drop below this threshold may lead to declines toward the $29.50 area.
While silver’s ability to hold above $30 reflects underlying demand, the recent pullback highlights its sensitivity to shifting risk appetite and macroeconomic developments. Traders are watching closely for signs of momentum above $30.60 to confirm a renewed uptrend.
Fed Policy and Market Expectations
Federal Reserve Governor Christopher Waller, a traditionally hawkish voice, hinted at dovish possibilities in recent remarks, suggesting the door is open to a December rate cut. Waller noted that while monetary policy remains “significantly restrictive,” conditions allow flexibility for a single cut without compromising the Fed’s ability to pause or slow future reductions if necessary.
His comments have fueled speculation ahead of Friday’s communication blackout, with markets awaiting additional clarity from San Francisco Fed President Mary Daly, the final scheduled speaker before the decision.
Key Insights From Waller’s Speech:
•Rate Cuts: Waller expressed tentative support for a December cut, though he acknowledged arguments for holding steady, emphasizing that incoming data will be pivotal.
•Inflation and Policy Outlook: While inflation forecasts remain on track for the 2% target in the medium term, Waller highlighted signs that progress may be stalling.
•Monetary Stance: The Fed remains committed to a “restrictive” policy stance, though the path for rate cuts will depend on evolving economic conditions.
Waller also critiqued the Fed’s previous average inflation targeting framework as overly backward-looking and called for a simpler approach to policy design. On the labor market, he noted a year-long trend of moderating demand relative to supply, reflecting a gradual cooling of economic activity.
The inverted yield curve, often viewed as a recession signal, was framed by Waller as potentially indicating lower future inflation and rates, underscoring a market expectation of easing financial conditions.
Outlook for Silver
Silver’s resilience at the $30 level will be tested in the coming weeks as traders weigh Fed policy signals against continued geopolitical uncertainty. While a dovish tilt from the Fed could reignite demand for the metal, its sensitivity to shifts in sentiment remains a critical risk. For now, silver remains at a crossroads, with $30 serving as the dividing line between recovery and further declines.
