Inflation data and dollar strength are weighing on silver
The dollar’s recent rally has intensified due to sticky US inflation data, which continues to weigh on silver prices despite Thursday’s modest gains. US consumer price indexes (CPI) for October pointed to continued inflationary pressures, and producer prices rose 2.4% year-on-year, exceeding expectations.
These developments have pushed government bond yields higher, increasing the opportunity cost of holding non-yielding assets like silver.
Silver, often considered a hedge against inflation, is being dampened by the strength of the dollar, making the metal more expensive for international buyers.
While markets still expect the Federal Reserve to cut rates in December, the longer-term outlook for interest rates remains bleak as inflation and economic resilience keep policymakers cautious.
Short-term forecasting
The short-term outlook for Silver hinges on breaking the $30.72 pivot point. A breakout could target $31.07, while a bust threatens a sharp decline below $30.18 due to market indecision.