The American dollar index fell by 3.40% to a low -month -old low, making silver more attractive for international buyers. In the meantime, the Central Bank of China has continued its gold purchases for a fourth consecutive month, indirectly supportive silver, which often follows Gold’s lead in the monetary metal space.
Trade policy remains a wildcard. President Trump’s shifting attitude towards rates for Mexico, Canada and China keeps markets uncomfortable, with possible economic disturbances that influence Silver’s industrial demand. Moreover, Germany’s unexpected tax stimulation plans rattled the European bond markets, which contribute to global economic uncertainty.
CPI report to stimulate the next move from Silver
The most important market event this week is the report of the US Consumer Price Index (CPI) on Wednesday, which is expected to show an increase of 0.3% in February after the 0.5% profit of January – the largest monthly increase since August 2023.
If inflation remains increased, this could force the FED to postpone the cuts, which may limit the benefit of Silver. On the other hand, a softer CPI print would reinforce the expectations of monetary relaxation, creating a more favorable background for silver. This year, markets are currently expecting 70 basic points of acceleration of the Fed Rate, but those expectations can shift, depending on the inflation data.
Market front views: FED policy and inflation are central
The direction of the short term in the short term will largely depend on inflation trends, interest expectations and worldwide economic conditions. If inflation remains stubborn, the FED can be forced to keep the rates stable longer than the markets anticipate that can weigh on silver. Further signs of economic delay – especially in banengish data – could stimulate the expectations for tariff reductions, to support Silver’s profession as a cover against monetary relaxation.