- Silves price trades in a limited range, with investors focusing on the US PCE inflation data for November.
- The Fed signaled fewer interest rate cuts for the next year in its policy meeting on Wednesday.
- The US Dollar and bond yields have rallied on Fed’s hawkish guidance.
Silver price (XAG/USD) trades in a tight range around $29.00 in Friday’s European trading session. The white metal consolidates as investors await the United States (US) core Personal Consumption Expenditure Price Index (PCE) data for November, which will be published at 13:30 GMT.
Economists expect the US annual core PCE inflation data to have accelerated to 2.9% from 2.8% in October. On month, the underlying inflation data is estimated to have grown steadily by 0.2%. Signs of mild slowdown in price pressures are unlikely to impact market expectations that the Federal Reserve (Fed) will pause the policy-easing spell in the policy meeting in January 2025. However, a sharp deceleration could weigh on them. On the contrary, a mild or sharp acceleration in price pressures would strengthen them.
In the policy meeting on Wednesday, the Fed reduced its key borrowing rates by 25 basis points (bps) to 4.25%-4.50% but signaled fewer interest rate cuts for 2025. The Fed dot plot showed that officials collectively see Federal Fund rates heading to 3.9% by 2025 against 3.4% projected in September.
Ahead of the US PCE inflation data, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, edges lower after posting a fresh two-year high at 108.50. 10-year US Treasury yields tick lower to 4.56% from a fresh six-month high of 4.60%. Higher yields on interest-bearing assets increase the opportunity cost of holding an investment in non-yielding assets, such as Silver.
Silver technical analysis
Silver price slides below the 200-day Exponential Moving Average (EMA), which trades around $29.35. The white metal weakens after a breakdown of the upward-sloping trendline around $30.20, which is plotted from the February 29 low of $22.30.
The 14-day Relative Strength Index (RSI) drops inside the bearish range of 20.00-40.00 range, guiding a downside momentum ahead.
Looking down, the September low of $27.75 would as key support for the Silver price. On the upside, the 50-day EMA around $30.90 would be the barrier.
Silver daily chart
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD corrects sharply toward 1.0950 ahead of US NFP, Powell
EUR/USD is extending its correction toward 1.0950 in the European session on Friday. The US Dollar has come up for air after the trade war and recession fears-led sell-off, weighing on the pair. Traders look to the US NFP report and Fed Chair Powell's speech for fresh directives.
GBP/USD remains heavy near 1.3000, US NFP data awaited
GBP/USD is battling 1.3000, under heavy selling pressure in European trading on Friday. Traders resort to profit-taking on their US Dollar short positiions, re-adjusting ahead of the critical US Nonfarm Payrolls data and Fed Chair Powell speech.
Gold price sticks to negative bias around $3,100; bears seem non-committed ahead of US NFP report
Gold price meets with a fresh supply on Friday, though the downside potential seems limited. Trump’s tariffs-inspired risk-off mood might continue to act as a tailwind for the precious metal. Fed rate cut bets weigh on the USD and also contribute to limiting losses for the XAU/USD pair.
Nonfarm Payrolls forecast: US jobs growth set to slow in March amid growing worries over US tariffs
Nonfarm Payrolls are forecast to rise by 135K in March, following a 151K gain reported in February. The United States Bureau of Labor Statistics will release the jobs data on Friday at 12:30 GMT. US labor data could impact the Fed’s interest rate path, potentially affecting the US Dollar's price action.
Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.