Silver price: In search of a silver lining from the US CPI data?

Silver price edged lower on Monday ahead of the US CPI data. While consumer prices are expected to have risen at a slower pace on a year-on-year basis, the forecast is for a surge in January. Indeed, investors are seek for some clarity from Tuesday’s data. As at the time of writing, it was down by 0.16% at $21.93.  


All eyes are on the US CPI numbers set for release on Tuesday; which explains why the asset has been hovering around the crucial zone of $22.00. The metal edged lower on Monday as the US dollar continued to trade above the support level of $103 for a week now.

The rise in the value of the US dollar and subsequent decline in silver price is largely founded on the revised forecast for January’s consumer prices.  After steadily declining for three months, consumer prices are expected to have risen by 0.5% in January compared to the prior month’s 0.1%.

Even so, the dollar index lacked enough momentum to hit the resistance level of $104 as CPI numbers on a year-on-year basis are forecast to have risen by 6.2% compared to 6.5% at a similar period in the past year.

Investors will be looking for some clarity from the US inflation data on where the Fed’s interest rate hikes may be headed in coming months. Signs of a hawkish Fed will likely weigh on silver price; outweighing the bullish bets on China’s recovery.

Silver price outlook

Silver price extended its losses on Monday to trade at its lowest level since 30th November 2022. Over a span of one week, the dual status metal has dropped by over 3% amid the uncertainties in the financial markets.

The metal hovered around the crucial zone of 22.00 for the second session in a row as investors’ focus remains on the US CPI numbers. A look at its daily chart points to a probable death cross as the 25 and 50-day EMAs appear to be converging at 22.90. Besides, it is at the periphery of the oversold territory with an RSI of 33.

On the one hand, I am cautiously bullish on silver price and expect it to continue finding support at 20.89.  on the upside, the probable rebounding will likely get curbed at 22.90. In the short term, I forecast that it will continue hovering around 22.00 while finding support 21.50.

silver price
silver price

Leave a Reply

Your email address will not be published.