- Silver is trading moderately in the $25.00 zone.
- Although an upside surprise could boost USD/US performance, it may also stimulate demand for inflation protection.
As expected, the prices of silver (XAG/USD) they are trading moderately near the $25.00 per troy ounce level.
Typically, when US economic data encourages the Fed to pursue a more aggressive policy, this would be bad for spot silver via 1) a stronger US dollar making silver more expensive for international buyers and 2) rising US yields, which increase the “opportunity cost” of holding non-earning assets like silver.
However, given the context of exceptionally high inflation in the US and around the world, and given uncertainties about how long this inflation will last amid the Russo-Ukrainian war and closures in China, the demand for protection against inflation remains high. Precious metals have generally been seen as the “ultimate hedge” against inflation thanks to their status as financial products that once formed a large part of the global monetary base.
Technical levels
Source: Fx Street
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