Silver Closes at $54.075 After Breaking $55 Support as Fed Meeting Looms
Key Facts
Silver futures closed at $54.075 on October 23, down from $55.007 in the previous session, according to EL7 data. Spot silver was $53.791 an ounce, compared with $54.434 on October 22. Futures and spot prices thus closed below $55, a level FX Empire described in an analysis published on October 23 as support that had been broken. The analysis said the next major support level is near $50, a technical level the source put in focus after the decline. In Friday trading, spot silver fell 1.3% to $53.81 an ounce, and the three metals cited in the Reuters report were heading for weekly losses.
The technical analysis places the break below $55 in the context of a move toward the next support area near $50, without implying that the price will necessarily reach it. The level indicates a range that market traders are watching after the price fell below it, while the discussion of support remains a technical assessment attributed to FX Empire. The Reuters report said higher energy prices fueled inflation concerns and supported expectations that U.S. interest rates would remain elevated ahead of the Federal Reserve meeting the following week. In Friday trading, Brent crude rose 3.1% to $116.72 a barrel, its highest level since June 2022, according to The Associated Press. The agency said the rise in oil weighed on stocks and brought inflation concerns back to the fore, at a time when interest-rate and yield expectations could affect the appeal of non-yielding metals.
The Federal Reserve’s industrial production release showed manufacturing output rose 0.3% in September, after falling 0.2% in August, and was 1.1% above its level a year earlier. The manufacturing index stood at 98.4 in September, on a 2017=100 basis, matching its July level, while it was 98.1 in April and May; the source described the September reading as preliminary. On yields, FX Empire said the H.15 release issued on October 22 showed the real yield on 10-year U.S. Treasury inflation-indexed securities at 2.76% on October 21. By contrast, The Associated Press reported that the yield on 10-year U.S. Treasuries rose to 4.99% on Friday. These data reflect a mixed economic backdrop for silver, with improved manufacturing output alongside higher nominal yields and energy-related inflation concerns.
Looking further ahead, the Silver Institute forecast in February that the market would remain in deficit for a sixth consecutive year in 2026, with global demand largely stable in its estimate. It also forecast a 2% decline in industrial silver fabrication in 2026 to a four-year low, near 650 million ounces, as it was affected by weaker demand from the solar-cell sector. A CME Group commentary published on October 20 said rising inventories and weak industrial demand from the solar-energy sector posed near-term headwinds. At the same time, FedWatch pricing showed an 82.8% probability of rates remaining unchanged at the October 28 meeting, according to the commentary. The figure remains a market-implied reading cited by CME on October 20, not an announced Federal Reserve decision.
The Federal Open Market Committee meets on October 27 and 28, with a press conference scheduled for October 28, according to the Fed’s calendar. The meeting follows a FedWatch reading cited by CME that favored holding rates steady, while The Associated Press said market expectations leaned toward no change at the meeting, with an increase more likely in December. U.S. personal income and outlays data are due on October 29, according to the U.S. Bureau of Economic Analysis. The bureau’s page listed the August release as the current release when it set the date for the next one. Near-term attention is focused on the Fed meeting and upcoming economic data, while the market also watches technical support near $50.