- The price of Silver rises near $31.00 despite inflation in the US remaining higher than expected in September.
- Core CPI accelerated to 3.3% from estimates and August’s reading of 3.2%.
- Traders expect the Fed to cut interest rates by 25 bps next month.
The price of Silver (XAG/USD) strengthens and jumps near $31.00 in the North American session on Thursday. The white metal experienced strong buying interest following the release of United States (US) Consumer Price Index (CPI) data for September.
The CPI report showed that inflation pressures grew at a faster rate than expected due to a sharp rise in clothing prices. In addition, medical and transportation services became more expensive.
Annual headline inflation slowed at a slower pace than projected, to 2.4% from 2.5% in August, as the impact of a sharp drop in energy costs was offset by a rise in food prices . Economists estimated that general inflation would have grown by 2.3%. Core CPI – which excludes volatile food and energy prices – accelerated to 3.3% from estimates and the previous release of 3.2%. Monthly headline and core inflation grew faster than projected.
The white metal struggles to find direction as market participants are taking time to digest inflation numbers and adjust expectations for the Federal Reserve’s (Fed) interest rate outlook for the rest of the year. According to the CME FedWatch tool, a 25 basis point (bp) rate cut is highly expected in November.
Meanwhile, the US Dollar (USD) is also showing volatile movements following the release of US inflation data. Looking ahead, investors will focus on the US Producer Price Index (PPI) data. US for September, which will be published on Friday.
Silver technical analysis
Silver price weakens after a breakout of the Double Top formation on a four-hour time frame. The mentioned pattern was activated after the asset broke below the horizontal support drawn from the September 30 low around $31.00, which now acts as resistance. A bearish crossover, represented by the 20- and 50-period exponential moving averages (EMAs) at $31.60, suggests weakness ahead.
The asset has temporarily found support near the 200 EMA, which is trading around $30.50.
The 14-day Relative Strength Index (RSI) has delivered a range reversal move, suggesting bearish momentum.
Silver Four Hour Chart
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.
