Silver Price Forecast: XAGUSD clears the 200-DMA and stays nearby 4-1/2 month highs, around $21.60s

Silver price is skyrocketing to a fresh four-and-half-month high, in the mid-North American session, following a US inflation report that came softer than economists’ expectations, and weighed on the US Dollar, while US Treasury yields plunged, a tailwind for precious metals prices. The XAGUSD is trading at $21.63.

US economic data portrays the effect of the Fed’s aggressive policy as inflation gets down and unemployment claims rise

The US Consumer Price Index (CPI) report for October showed that inflation is finally easing, with headline CPI figures jumping 7.7% YoY, below expectations of 7.9%, while the core CPI, which excludes volatile items like food and energy, fell to 6.3% YoY, below estimates of 6.5%. That said, the US Dollar weakened across the board, while US Treasury bond yields plunged, with the 10-year down 24 bps at 3.857%.

At the time of typing, US equities are rallying sharply, led by the Nasdaq, up by almost 6%. The US Dollar Index, which tracks the greenback’s value vs. a basket of peers, slides 1.71% at 108.527, a tailwind for the white metal.

At the same time, the US labor market updated the unemployment claim figures, which were overshadowed by the US inflation report. Initial Jobless Claims for the last week rose by 225K vs. 220K estimates

Aside from this, Fed officials crossed newswires after the release of US economic data. Dallas Fed President Logan said that October CPI data is welcomed, but there’s a long way to go. She added that the process of cooling the economy is just getting started. Of late, the San Francisco Fed President Mary Daly said October’s CPI was good and is just one “example of encouraging data.” She favors slow, steady rises to the Federal Funds rate (FFR), expecting it would peak at around 4.9%.

Silver (XAGUSD) Key Technical Levels