- Silver price rises sharply to $22.70 amid weakness in the US Dollar.
- Easing geopolitical tensions have impacted safe-haven appeal.
- Sticky US core PCE price index data may postpone Fed’s plans of quitting hawkish stance.
Silver price (XAG/USD) recovers sharply to near $22.70 as the US Dollar comes under pressure in the London session on Tuesday. The white metal rises as the US Dollar faces a sell-off due to easing geopolitical tensions.
US President Joe Biden is confident of a ceasefire between Israel and Palestine by next week. The US State Department said there has been progress in negotiations for releasing Israeli hostages.
The US Dollar Index, which represents the Greenback’s value against six rival currencies, extends its correction to 103.70.
This week, investors will focus on the United States' core Personal Consumption Expenditure price index (PCE) data for January, which will provide more insights into the timing of the Federal Reserve’s (Fed) rate cuts. Investors anticipate that monthly core PCE rose sharply by 0.4% from 0.2% in December. The annual core PCE data is anticipated to decelerate to 2.8% from the former reading of 2.9%.
The expectations for a rate cut by the Fed will be postponed if the underlying inflation turns out hotter than expectations.
On Monday, Kansas City Federal Reserve Bank President Jeffrey Schmid said inflation remaining above 2%, tight labor market conditions, and a decent demand outlook indicate that there is no need to rush for rate cuts.
Silver technical analysis
Silver price finds a temporary cushion near the 61.8% Fibonacci retracement (plotted from February 14 low at $21.93 to February 16 high at $23.50) at $22.53 on an hourly scale. The white metal climbs above the 20-period Exponential Moving Average (EMA), which trades around $22.58.
The 14-period Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, indicating consolidation ahead.
Silver hourly chart
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 drops to near 1.0850, further support at nine-day EMA
EUR/USD continues to lose ground, trading around 1.0860 during the Asian hours on Friday. From a technical perspective on a daily chart analysis indicates a sideways trend for the pair as it continues to lie within the symmetrical triangle.
GBP/USD posts modest gains above 1.2650, focus on the Fedspeak
The GBP/USD pair posts modest gains near 1.2670 during the Asian session on Friday. Meanwhile, the USD Index recovers some lost ground after retracing to multi-week lows near 104.00 in the previous session.
Gold price gains ground, with Fed speakers in focus
The Gold price trades with a positive bias on Friday. The bullish move of precious metals in the previous sessions was bolstered by the softer-than-expected US inflation data in April, which triggered hope for rate cuts from the US Fed.
XRP steadies at $0.51 as Ripple plans to expand XRP Ledger, custody services in Africa
Ripple hovers close to $0.51 on Friday, above the psychologically important $0.50 level, as traders await the court ruling of the lawsuit against the US SEC and amid new commitments from the firm to expand its services in Africa.
Disputes and De-risking: US-China trade dispute changes trade flows
The bilateral trade dispute between the US and China is entering a new round and is leading to renewed discussions about the deglobalisation of global trade in goods.