Silver gains 1.60% to $52.35 as hotter-than-expected October inflation data fuels Fed rate-hike bets, pushing the 10-year Treasury yield above 5% and strengthening the US Dollar.
Hotter-than-expected October CPI (0.4%, core 0.3% vs 0.2% forecast) led markets to fully price a December Fed rate hike, with an 88% chance of 25 bps and 12% of 50 bps. The DXY rose 0.68% on Wednesday, extending its recovery for a second consecutive day. Persistent inflation, with core running at a 3.75% three-month annualized pace per Deutsche Bank, supports a hawkish Fed and a stronger dollar.
The inflation surprise triggered a sharp sell-off in US government bonds, pushing the benchmark 10-year Treasury yield briefly above 5% on Tuesday. With markets fully pricing a December Fed rate hike and core inflation at a 3.75% three-month annualized pace, upward pressure on yields is likely to persist, which is bullish for the yield itself.
Silver gained 1.60% to about $52.35 on Wednesday despite a stronger dollar and 10-year Treasury yields briefly above 5%, showing resilient buying interest. However, markets fully price a December Fed hike (88% chance of 25 bps, 12% of 50 bps) after core CPI of 0.3%, which could limit further gains. Technically the metal is capped by the 100-period SMA at $52.37, leaving the near-term tone neutral to slightly heavy.
Silver prices rose 1.60% to $52.35 on Wednesday, showing resilience despite a stronger US Dollar and 10-year Treasury yields briefly topping 5%. The gains follow October CPI data showing a 0.4% headline increase, which has led markets to fully price in a December Federal Reserve rate hike. While buying interest remains, technical resistance at the 100-period SMA of $52.37 and persistent inflation concerns may cap further upside.
US inflation came in hotter than expected for October, so markets now fully expect the Federal Reserve to raise rates in December, which supports the dollar. The DXY rose 0.68% on Wednesday.
Hotter-than-expected October inflation data led markets to fully price a Fed rate hike in December, triggering a sharp sell-off in US government bonds and pushing the 10-year yield briefly above 5%.
The article shows silver gained 1.60% to around $52.35 despite higher yields and a stronger dollar, suggesting strong buying interest, though further Fed tightening could limit additional gains.
Resistance sits at $52.37, then $53.20 and $53.72; support is at the 200-period SMA near $51.52 and then $51.10. A break below these could open a deeper correction.