Silver came under renewed selling pressure as oil climbed to fresh weekly highs, and the pullback in crude overnight erased only some of the losses. Tomorrow's US CPI report is the next key catalyst for the metal.
Silver came under renewed selling pressure yesterday as oil prices climbed to fresh weekly highs. The Middle East situation remains largely unchanged, with Houthi attacks on Saudi Arabia continuing and US-Iran negotiations still at an impasse.
This backdrop is likely to keep a lid on silver's upside unless the Fed adopts a more dovish stance, leading to a decline in real yields and the US dollar.
US CPI could swing the Fed outlook
US-Iran negotiations will stay in focus, but tomorrow's US CPI report could also be a major catalyst if the data deviates from expectations.
A higher than expected core CPI could increase the chances of a Fed rate hike in October, putting further pressure on silver prices. Conversely, a soft report could provide some short-term support for the precious metal, although it wouldn't change the bigger picture just yet.
Silver faces 55.0 downside target or 71.55 upside level
On the daily chart, silver has been consolidating around the lows, with a downward trendline that could act as resistance. If the price pulls back into it, sellers could lean on the trendline to position for a drop into the 55.0 level, while buyers want a break higher to extend bullish bets into the 71.55 level.
On the 4 hour chart, the price recently broke above the minor downward trendline that had defined bearish momentum. That is a sign of a loss of momentum and could precede a bigger pullback. A strong resistance zone sits around the 62.00 level, where sellers could step in to target 55.00.
Thursday brings the US PPI, US Retail Sales and the latest US Jobless Claims figures.
Source: Investinglive
Trading involves risk.
Risk Disclaimer
