- Silver prices fall to the 100-day EMA, extending their losses to the 50-day EMA at $19.08.
- US core CPI grew 5.1% year-on-year, above estimates, paving the way for further tightening.
- Investors are focused on the Fed’s monetary policy meeting in November, with the expectation that the US central bank will hike 75 basis points.
Silver price hits a key resistance level as the New York session progresses, as US economic data warrant further action from the Fed, while a boost in risk appetite maintains safe-haven assets under pressure, but dollar bucking trend as next week’s Fed monetary policy decision looms. XAG/USD is trading at $19.17 a troy ounce, down 2%, after reaching a daily high of $19.63.
US Core PCE Justifies More Aggressiveness from the Fed
Wall Street extends its gains despite the fact that the dollar rises. The Commerce Department’s measure of inflation, which is also the Fed’s favorite inflation gauge, rose 0.5% MoM, above the previous month’s reading, justifying the need for further rate hikes in middle of the Fed pivot narrative circulating through financial markets. In addition, the year-on-year figure increased by 5.1%, beating forecasts of 4.9%.
In another report, the Employment Cost Index (ICE), an indicator used by the Fed to treat inflation over wages, increased 1.2% in the July-September period, according to the Labor Department.
Outside of the inflation data, the University of Michigan Consumer Sentiment, in its final reading for October, was unchanged at 59.9, while inflation expectations were barely budged. According to the survey, one-year inflation is estimated at 5% from 5.1%, while 5-year inflation is estimated at 2.9%.
Most recently, the Dallas Fed’s trimmed average PCE for September fell from 6% to 4.3%. At the same time, the Atlanta Fed GDP forecast for the fourth quarter is 3.1%.
Silver is on the defensive as US Treasury yields have risen which has helped the dollar rise.
The market reaction to the US data was felt in fixed income markets as Treasuries sold off, which was positive news for bond yields. The 10-year US Treasury bond yield gains nine basis points to 4.01%, a headwind for the precious metals segment.
Meanwhile, the Dollar Index, a gauge of the dollar’s value against a basket of its rivals, is up 0.30% at 110.895.
Now market participants are focused on next week’s Federal Reserve Open Market Committee (FOMC), where most analysts expect the Fed to raise rates by 75 basis points, FedWatch reports. of CME, with probabilities of 84.5%. However, the December meeting is split between 50 and 75 basis points, with most investors
Silver Key Technical Levels
Source: Fx Street
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