- Silver price remains below $23.00 despite underlying US PCE
- The rise in US bond yields keeps the price of Silver in decline.
- Strong consumer spending contributed to significant GDP growth in the third quarter.
The price of the Silver (XAG/USD) is experiencing some selling pressure as the US Bureau of Economic Analysis (BEA) has reported that the underlying Personal Consumption Expenditure (PCE) price index for September remained in line with expectations.
The Federal Reserve’s (Fed) preferred inflation indicator rose 0.3%, as expected, compared to the nominal 0.1% recorded in August. Annual core PCE inflation data slowed to 3.7%, in line with estimates, from August’s reading of 3.9%.
US Dollar Index (DXY) falls sharply on continued decline in core PCE inflation, while Silver prices remain under pressure due to sharp rebound in US 10-year Treasury yields, near 4.87 %. Looking ahead, investors will focus on the Fed’s monetary policy.
According to CME’s Fedwatch tool, traders see the Fed almost certain to keep interest rates unchanged at 5.25%-5.50%. The odds of a further interest rate hike at either of the two remaining monetary policy meetings in 2023 have fallen sharply to 20%.
Fed policymakers hope that high U.S. Treasury yields will be enough to curb overall spending and investment. Cleveland Fed President Loretta Mester stated last week that rising bond yields are equivalent to a 25 basis point (bp) rise in interest rates.
The blockbuster third-quarter gross domestic product (GDP) report, released on Thursday, indicated that business investment had fallen for the first time in two years due to rising borrowing costs. However, robust consumer spending and increased residential investment contributed to significant growth.
Silver technical analysis
The price of Silver continues to defend the support zone drawn in a range of $22.40 – $22.56 on a two-hour scale. The 50-period exponential moving average (EMA) continues to act as a roadblock for Silver price bulls.
The Relative Strength Index (RSI) (14) is oscillating in the range of 40.00-60.00, indicating that investors are waiting for a possible trigger to build new positions.
Silver Two-Hour Chart
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
