Silver prices rose to $53.00 despite a 2.4% surge in 10-year US Treasury yields to 5%, as hot October CPI data sparked concerns over a hawkish Federal Reserve policy shift.
The October core CPI print at +0.30% versus +0.2% expected was the third consecutive month at that pace, an annualised +3.75% — the fastest since April 2024 per Deutsche Bank — and headline CPI ran faster still. That drove the biggest bond selloff of the day, with 10-year yields up 2.4% to around 5% and yields surging across the curve.
The hotter-than-projected October CPI (core +0.30% vs +0.2% expected) has heated debate that the Fed could deliver a supersize rate hike at the December meeting, and Commerzbank sees inflation staying high until 2027. A more hawkish Fed and higher yields support the US dollar, which also weighs on silver as it is priced in dollars.
October US CPI came in hot (core +0.30% vs +0.2% expected, headline +0.35%), fueling Fed supersize-hike debate for December and pushing 10-year yields to around 5%. Higher yields and a hawkish Fed backdrop reduce the appeal of non-yielding silver, and the metal trades below its 20-day EMA at $53.89 with RSI at 43.6, keeping the near-term bias bearish despite today's roughly 3% rebound to near $53.
Silver prices climbed nearly 3% to $53.00 on Wednesday, defying pressure from surging US Treasury yields. The move follows October CPI data showing core inflation at +0.30%, fueling expectations for a potential supersize Federal Reserve rate hike in December. Despite the intraday rally, the metal remains technically bearish as it trades below its 20-day EMA of $53.89.
The October CPI came in above consensus, with core monthly inflation at +0.30% versus +0.2% expected and headline at +0.35% versus +0.3% expected, pushing yields surging across the curve, with the 10-year 2.4% higher at around 5%.
It raises expectations that the Fed could deliver a supersize rate hike at the December policy meeting, which is supportive for the dollar as higher US interest-bearing asset yields increase their appeal.
The hot October US CPI pushed US Treasury yields sharply higher, and higher yields make non-yielding silver less attractive. Commerzbank expects inflation not to decline until 2027, which they say will likely keep the silver price under pressure.
A sustained break above the 20-day EMA at $53.89 would be needed to soften the current bearish bias and open the way for a more meaningful recovery.