Key Takeaways
- Silver price is inching towards $29 amidst reduced expectations of a large Fed rate cut.
- Rise in US Dollar and bond yields following US CPI data showing inflation stickiness.
- Upcoming data on US PPI and Initial Jobless Claims await investor attention.
Silver Price Trends
Silver price (XAG/USD) is moving closer to the significant resistance level of $29.00 during Thursday’s European session. This rise comes despite the market confidence that the Federal Reserve (Fed) will opt for a gradual interest rate reduction of 25 basis points (bps) to reach 5.00%-5.25% this month.
Market Speculation and Data Impact
Speculation for a more aggressive Fed rate cut has diminished after the latest US Consumer Price Index (CPI) data for August showed inflationary pressures remaining steady. The rise in annual US core inflation, aligning with estimates and the previous release of 3.2%, has played a role in this shift.
The diminished rate cut expectations have led to a boost in the US Dollar (USD) and bond yields. The US Dollar Index (DXY) maintains gains near 101.70, while 10-year US Treasury yields have increased to 3.67%. Generally, higher yields on interest-bearing assets tend to suppress the Silver price, but the metal has remained resilient in this scenario.
Upcoming Data Focus
Investors are eagerly awaiting the US Producer Price Index (PPI) data for August, which is scheduled for release at 12:30 GMT. Additionally, focus will be on the US Initial Jobless Claims data for the week ending September 6. Recent statements from Fed officials reflect heightened concerns about protecting jobs, adding significance to the jobless claims data.
Silver Technical Analysis
Silver is trading within a narrow range of $27.70-$29.20 for over a week. The resistance around $28.80 is being capped by the 200-period Exponential Moving Average (EMA). The 14-period Relative Strength Index (RSI) indicates a sideways trend, oscillating between 40.00-60.00.
Silver FAQs
Silver is a highly traded precious metal that offers investors diversification opportunities and potential hedges. Its price movements are influenced by various factors, including geopolitical events, interest rates, and the performance of the US Dollar. Besides its investment value, Silver is widely used in industrial applications due to its unique properties, impacting its price dynamics.
(This story was corrected on September 12 at 11:30 GMT to say that Silver price trades in a limited range of $27.70-$29.20, not $27.70-$28.20.)