Silver price prediction ahead of the US inflation data

By: Faith Maina
Faith Maina
Faith strives to break down complex developments so investors can make better informed decisions. When Faith is not immersed… read more.
on Nov 10, 2021
  • Silver price outlook is rather neutral as investors await cues in the form of the US CPI data.
  • Investors are keen on when the Fed will hiking interest rates despite maintaining inflation is transitory.
  • Higher-than-expected CPI numbers may test the steadiness of the crucial support level of $24.

Silver price has recorded subtle movements in Wednesday’s session as investors await further cues in the form of US CPI data. Higher-than-expected numbers will likely weigh on the precious metal.

US inflation data

Investors have their eyes fixated on the US CPI data scheduled for Wednesday afternoon, hence the subtle silver price movements. In the past week, the Federal Reserve indicated that it would begin tapering its asset purchases in November. However, the focus for analysts and investors alike appears to be on when the central bank will start hiking interest rates.

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Despite the consistent rise in prices, the Fed has maintained its narrative that the inflationary pressures are transitory. Earlier this week, the Minneapolis Fed President, Neel Kashkari and San Francisco Fed President Mary Daly reiterated Powell’s assertions. However, St. Louis Fed President, James Bullard is of a different opinion. During an interview on Fox Business on Monday, he indicated the likelihood of two rate hikes in the coming year.

In today’s session, analysts expect consumer prices to have risen by 0.6% in October MoM compared to the previous 0.4%. With the exclusion of the volatile food and energy components, core CPI is forecasted at 0.4% MoM, which is higher than the previous 0.2%. Higher-than-expected figures will likely boost the US dollar while weighing on precious metals such as silver. The market will also be reacting to the initial jobless claims data.

Silver price outlook

Silver price is seesawing around 24.25 as investors avoid placing huge bets ahead of the US inflation data scheduled for later on Wednesday. The subtle movements come two days after it dropped from an intraday high of 24.50. At the time of writing, it was down by 0.3% at 24.23.

After dropping to a two-week low of 23.02 at the beginning of the month, the precious metal has since risen by over 5%. On a two-hour chart, it is trading above the 50-day EMA and slightly below the 25-day EMA. At its current level, the outlook is rather neutral.

I expect silver price to trade sideways ahead of the US CPI numbers. Subsequently, higher-than-expected figures will likely have the bears testing the crucial support at 24. Past this support zone, which would equate to a move below 23.95, it may find support at 23.75.

On the upside, the next target will be at 24.50. However, to reach that goal, there need to be enough momentum to push past the resistance at 24.46.

silver price
silver price
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