Silver Price Reacts to US Inflation Report
- Silver price bounces back to near $31.00 after the US inflation report, which showed that price pressures remain sticky.
- Annual headline and core CPI rose by 2.6% and 3.3%, respectively, as expected.
- The optimism on Trump trades will keep the Silver price edgy.
In Wednesday’s North American session, the Silver price (XAG/USD) has shown resilience by holding recovery to near $31.00 following the release of the United States (US) Consumer Price Index (CPI) data for October. The Bureau of Labor Statistics (BLS) highlighted that price pressures remain persistent, with the annual headline inflation accelerating to 2.6% from 2.4% in September.
Key Points from the US Inflation Report:
- Core CPI rose in line with estimates at 3.3%.
- On a monthly basis, both headline and core inflation grew by 0.2% and 0.3%, respectively.
- Sticky price pressures are less likely to impact market speculation for Federal Reserve (Fed) interest rate cuts in December.
Despite the slight drop in the US Dollar Index (DXY) after the inflation data release, it has maintained gains near 106.00. Additionally, 10-year US Treasury yields have slid to around 4.38%.
Factors Affecting Silver Price
The overall outlook for the Silver price remains weak due to the influence of the so-called “Trump trades,” which reflect optimism around assets expected to perform well under President-elect Donald Trump’s administration.
Here are some key points to consider:
- Trump’s policies, such as higher import tariffs and lower corporate taxes, could boost US economic growth and price pressures.
- This scenario would be favorable for US bond yields, leading the Federal Reserve to maintain restrictive interest rates.
- Historically, higher yields on interest-bearing assets increase the opportunity cost of holding non-yielding assets like Silver.
Silver Technical Analysis
Technical indicators suggest:
- The Silver price is approaching an upward-sloping trendline around $29.00.
- The 20-day Exponential Moving Average (EMA) is declining, currently around $32.00.
- The 14-day Relative Strength Index (RSI) is near 40.00, indicating a potential bearish momentum.
Silver Daily Chart
Silver FAQs
Here are some frequently asked questions about Silver:
- What is Silver?
Silver is a precious metal with high trading volume among investors. It is used as a store of value, medium of exchange, and can be traded through various vehicles. - What factors influence Silver prices?
Factors like geopolitical instability, interest rates, US Dollar movement, and industrial demand can impact Silver prices. - How is Silver used in industries?
Silver is widely used in electronics and solar energy sectors due to its high electric conductivity. - How does Silver price relate to Gold?
Silver prices often follow Gold’s movements, with the Gold/Silver ratio providing insights into their relative valuation.