Silver rises as softer US inflation weighs on US Dollar

Silver gains around 1.7% and trades near $58.80 per ounce.
US Core PCE inflation rises only 0.1% MoM, below the 0.2% market forecast.
Slower US economic growth and broad US Dollar weakness support demand for precious metals.

Agustin Wazne FXStreet

Silver prices advance toward $58.80 per ounce on Thursday, gaining around 1.7% as softer United States inflation data and weaker-than-expected economic growth place pressure on the US Dollar.

The US Core Personal Consumption Expenditures Price Index rose 0.1% MoM in June, below the 0.2% market forecast and slowing from the previous 0.3% increase. On an annual basis, underlying inflation eased to 3.3% from 3.4%.

Headline PCE declined 0.1% on the month, following a 0.5% increase previously, while the annual rate slowed to 3.7% from 4.1%. The softer inflation readings reinforced expectations that the Federal Reserve (Fed) could adopt a less restrictive monetary policy stance if price pressure continues to moderate.

US economic growth also disappointed. Gross Domestic Product (GDP) expanded at an annualized rate of 1.5% in the second quarter, below expectations of 2.1%. However, the GDP Price Index surged 6.3%, well above the 3.6% forecast, indicating that some inflationary pressure remains elevated.

Short-term technical analysis:

On the 4-hour chart, XAG/USD trades at $58.76, holding a modest bullish bias as it stays above both the 100-period Simple Moving Average (SMA) at $58.10 and the 20-period SMA at $57.76. The pair has also reclaimed nearby horizontal support at $58.66, while the Relative Strength Index (RSI) around 57 hints at improving but not overstretched bullish momentum.

On the downside, initial support is seen at $58.66, followed by $58.53, before the 100-period SMA at $58.10 and the 20-period SMA at $57.76 underpin the broader structure. On the topside, immediate resistance aligns at $58.94, with a subsequent barrier at $59.26; a sustained break above these caps would open the way for a deeper extension of the current recovery phase.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Author

Agustin Wazne

FXStreet

Agustin Wazne joined FXStreet as a Junior News Editor, focusing on Commodities and covering Majors.

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