Silver prices fell to $51.23 as October US inflation data exceeded forecasts, strengthening the US Dollar and increasing the likelihood of further Federal Reserve interest rate hikes.
October US CPI beat forecasts at 0.4% MoM (core 0.3% vs 0.2% expected) and hawkish Fed comments lift yields and the dollar, pushing silver down 3.97% to around $51.23. Higher rates raise the opportunity cost of holding non-yielding silver. Price sits below the 21-, 100- and 200-day SMAs with support only at $50 and the $48.62 YTD low.
October CPI beat estimates (0.4% MoM headline, 0.3% core vs 0.2% expected) and Fed officials signalled more hikes, with an 89.2% market-implied chance of a 25-bps December move. The dollar rose broadly, gaining 0.54%-1.16% against majors, strongest versus the Australian dollar.
The article states US Treasury yields are being pushed higher by the inflation beat and hawkish Fed rhetoric, with an 89.2% implied probability of a December hike. Rising yields follow directly from hotter CPI and comments backing at least two more 25-bps increases.
Silver (XAG/USD) dropped 3.97% to $51.23 on Tuesday following a hotter-than-expected October US CPI print. The data, showing a 0.4% monthly headline increase, bolstered expectations for further Federal Reserve tightening, pushing the US Dollar and Treasury yields higher.
Stronger-than-expected US inflation data lifted the US dollar and Treasury yields, making non-yielding silver less attractive; it trades around $51.23, down 3.97%.
Immediate support lies near $50 and the year-to-date low of $48.62, while resistance sits at the 21-day SMA around $54 and then $55.
October inflation came in above forecasts and Fed officials backed further rate hikes, with traders assigning an 89.2% probability to a 25-bps hike in December.
The dollar was strongest against the Australian dollar (up 1.16%), and also gained against EUR, GBP, JPY, CAD, NZD and CHF.
October inflation surprised to the upside and Fed officials signalled more rate hikes, pushing yields higher.