Silver Price Analysis: XAG/USD cracks below $22 after US inflation report

Silver price (XAG/USD) faces selling pressure above $22 after the United States inflation report for September remained almost in line with expectations. The US Bureau of Labor Statistics reported that the core Consumer Price Index (CPI) grew by 0.3% as expected. The annual core CPI data softened to 4.1% from the former release of 4.3%, matching expectations.

The monthly headline CPI expanded at a higher pace of 0.4% while investors forecasted growth by 0.3%. Annualized headline inflation data remained steady at 3.7% against expectations of 3.6%. The headline CPI data rose marginally as global oil prices spiked gasoline rates and food products.

The US Dollar Index (DXY) delivered a vertical upside move after discovering strong buying interest near 105.50. The strength in the USD Index came as investors hoped that Federal Reserve (Fed) policymakers could turn hawkish about the interest rate outlook. A slowdown in progress in inflation declining toward 2% could elevate the hawkish Fed bets.

Meanwhile, the S&P500 opens on a marginally positive note as the market mood is still upbeat. Investors hope that the impact of the Israel-Hamas conflict will be limited if other Middle East nations don’t intervene.

Silver technical analysis

Silver price struggles to extend upside above the horizontal resistance plotted from August 15 low at $22.23 on a two-hour scale. Earlier, the white metal delivered a strong rally after a breakout of the Symmetrical Triangle chart pattern. The 20-period Exponential Moving Average (EMA) at $22.00 continues to provide support to the Silver price bulls.

The Relative Strength Index (RSI) (14) trades in the bullish range of 60.00-80.00, which indicates that the bullish momentum is already active.

Silver two-hour chart