Upside resistance includes $31.29, followed by the minor top at $31.54 and the 50-day moving average. A move below $30.61 could open the door for sellers to target $29.68 and possibly the 200-day moving average.
Weakness of the dollar and exchange rate expectations are strengthening the recovery
The US dollar index fell 0.43%, giving silver a tailwind as it became more attractive to holders of other currencies. This is because traders anticipate key economic data, especially key PCE inflation figures, which are closely watched by the Federal Reserve.
The PCE data could significantly influence market expectations for interest rate policy. Currently, the probability of a rate cut in December has risen to 66.5%, up from 55.7% earlier this week, according to CME Group’s FedWatch tool. Lower interest rates tend to support non-yielding assets like silver.
Short term market forecast
The near-term price of silver will likely depend on current economic data, especially the PCE numbers. A warmer-than-expected outcome could reduce expectations for rate cuts, strengthen the dollar and put pressure on silver prices. Conversely, a cooler PCE print could strengthen bets on rate cuts, providing additional support for the metal.
Technically, a sustained move above the pivot at $30.61 could signal further recovery, with $31.54 a key upside target. If this level is not maintained, there could be selling pressure, with $29.68 and $29.04 as downside targets. Traders should closely monitor the PCE release and other data for potential volatility in silver prices.
More information in our Economic Calendar.