Silver Price Forecast: XAG/USD’s post-CPI reversal is limited at $27.50 area

Silver Prices’ (XAG/USD) reversal following stronger-than-expected US inflation data has been contained at the mid-range of the $27.00’s. The metal is regaining some ground as the dust from the US data settles, with the daily chart practically flat.

Consumer prices accelerated unexpectedly in the US in March, with the headline inflation accelerating to 0.4% against expectations of a 0.3% reading, while the yearly rate rose to 3.5% from 3.2% in February. Likewise, the Core inflation accelerated to 0.4% from 0.3% in the previous month, while the yearly rate remained steady at 3.8%.

These figures confirm that price pressures remain stubbornly high at levels well above the Fed’s 2% target rate which has crushed hopes of monetary easing in the coming months.

US Treasury yields skyrocketed after the news, dragging the US Dollar up with them, although the negative impact on precious metals has been limited. Silver, in particular, has retraced most of the ground lost after the release and is trading near the daily opening.

XAU/USD Technical Analysis

The XAU/USD’s broader bullish trend remains intact, with no clear sign of a correction so far except for the bearish divergence in the RSI. Immediate support is at $27.57 and below here, at $26.85. Resistances are $28.53 and the $30,00 psychological level.

XAG/USD 4-hour Chart