Silver attracts attention at the $63 psychological level amid a bearish spot market... Expectations of 'Fed easing' limit the decline

Rebound Signal After Sharp Drop, Forming Technical Support

Silver(XAG/USD) is showing strength around $64.95 during Asian trading hours. Although profit-taking orders have increased following the record high, market experts assess that the depth of the correction may be limited. In particular, the area near $63 acts as a key psychological level, supporting the market from further declines.

US Inflation Weakens, Reigniting ‘Fed Additional Rate Cuts’ Scenario

According to data released last Thursday by the U.S. Bureau of Labor Statistics(BLS), the November Consumer Price Index(CPI) rose only 2.7% year-over-year. This significantly undercuts the market consensus of 3.1%. Notably, the core CPI, which excludes volatile food and energy prices, recorded a result of 2.6%. This figure is below the expected 3.0% and marks the lowest increase since 2021.

As inflation slows more than expected, the likelihood of the Fed cutting interest rates increases. Silver, which does not generate interest income, benefits from rate cuts because the relative cost of holding non-yielding assets decreases, acting as a key factor in price appreciation. The current correction is interpreted not as a trend reversal but as a pause after a short-term surge, and this is the underlying reason.

US-Venezuela Tensions Rise, Safe Asset Preference Strengthens

Geopolitical risks are also emerging as a support factor for silver. According to The New York Times, the Venezuelan government has ordered naval escorts for oil tankers. This move is seen as a measure that could increase the risk of conflict between the two countries, following the Trump administration’s directive for a “blockade” targeting Venezuela’s oil industry.

As international tensions escalate, investors tend to shun risky assets and flock to safe-haven assets. Precious metals, including silver, function as typical safe assets, and as geopolitical uncertainties deepen, they can act as a stabilizing factor against declines. Ultimately, the combined effects of signals of Fed easing and geopolitical tensions are creating a situation where the technical support level around $63 is being maintained.