Silver Trades Below Resistance

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Silver Trades Below Resistance

Silver (Xag/Usd) Trades Below

Silver (XAG/USD) has recovered somewhat but is still trading under $31.00 resistance on Wednesday. This development happened after the release of the US CPI, which showed an increase in inflation.

The BLS report showed that annual inflation has gone up to 2.6% last month. This is around 0.6% higher than the Fed's target of 2% and has even put the next rate cut at risk.

Higher Cpi Print Helps Us Dollar

The core CPI has also increased on a yearly and monthly basis. So, its safe to say that the increase in inflation isn't just driven by the increased prices of volatile items such as food & energy.

Despite the CPI report, the market's forecast for the next rate cut in December remains unchanged. That's why the DXY only showed minor selling and is still near the 106.00 handle.

Meanwhile, the 10-year bond yields have gone down to 4.38%. Despite this, the bond yields are still green over the long term.

Over all, the outlook for Silver (XAG/USD) is weak due to the US Dollar rally and the Trump effect. It seems that investors are picking those assets that would perform well in the Trump era.

So, it's safe to say that Silver is being sold due to Trump's future policies, which include heavy tariffs. Also, the interest rates in the USA will remain elevated as Trump's policies will increase inflation.

So, that's also a factor that is negative for the Silver (XAG/USD) & other non-yielding assets.

Right now, the Silver (XAG/USD) is weak as the market is now trying to digest the recent CPI. It all started when the Silver (XAG/USD) lost the $32.50 handle to the bears which is now acting as resistance.

In the short-term, the Silver (XAG/USD) is also weak, as evidenced by the 20 EMA, which is moving lower. As of now, the 20 EMA is seen near the $32.00 handle which makes it a dynamic resistance.

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