Silver price forecast: metal hits 11-week low amid U.S. inflation data
Silver tests $30 resistance amid inflation pressure
Silver prices are facing renewed pressure, testing the pivotal $30.00 level after dropping to an 11-week low near $29.00 during the early Asian session. While a recovery later in the European session lifted prices back to $30.00, bearish sentiment remains evident, fuelled by rising US inflation data and technical indicators suggesting downside momentum.
Silver price analysis (November 2024). Source: TradingView.
The personal consumption expenditures (PCE) price index, a key inflation measure, rose to 2.3% in October, up from 2.1% in September, with the core PCE increasing to 2.8% from 2.7%. These stronger-than-expected figures, alongside resilient consumer spending, have reinforced the Federal Reserve's restrained approach on rate cuts. The Fed’s latest meeting minutes highlighted a steady focus on inflation control and a strong labor market, signaling limited room for monetary easing in the near term. This policy stance has bolstered the U.S. dollar, applying additional downward pressure on non-yielding assets like Silver.
RSI and inflations signals silver bearish outlook
On the technical front, Silver's Relative Strength Index (RSI) remains below 50, reflecting continued bearish momentum. The $30.00 level, previously a critical support zone since September, is now being tested as a potential resistance. A sustained break below this level could signal a significant bearish shift in market sentiment, with traders eyeing further declines in the near term.
Despite the brief recovery in the European session, the bearish outlook for Silver aligns with broader market conditions. The stronger dollar, driven by inflation data and the Fed’s firm stance, diminishes the appeal of Silver as a safe haven. Traders will closely watch whether Silver can decisively reclaim the $30.00 level or confirm its role as a resistance, which could pave the way for deeper losses.
With inflation and dollar strength weighing on Silver, the price outlook leans bearish unless market conditions shift or technical indicators show a reversal in momentum.
Silver price faces challenges surpassing $30 amid Fed rate speculations. This rebound comes as the dollar softened from recent highs, providing breathing room for the precious metal.
