Silver price rose on Tuesday after the release of the November CPI report in the US. While the Gold price held on to its $1,980 support level, Silver dipped to retest a key trendline on its chart which we will discuss later.
At press time, Silver price per ounce stood at $22.867 which was a 0.32% increase on a daily timeframe and a 0.40% loss on the weekly timeframe. The price action is expected to remain volatile for the rest of this week.
This week is jam-packed with major economic events. In addition to today’s release of the CPI data, the US, UK and EU central banks are expected to decide on the interest rates in their respective jurisdictions later this week. Due to this reason, precious metals are expected to remain volatile for the rest of the week.
The November CPI data showed that the YoY inflation remained in line with the market estimates of 3.1%, a decrease from October’s figure of 3.2%. This resulted in a further weakness in the dollar as the markets now expect another pause in rate hikes after this week’s FOMC meeting.
Gold and Silver prices rose as the DXY index fell 0.11% after another blow to the yearly inflation. Nevertheless, both metals remain well below their monthly highs. The XAU/USD pair tumbled after refreshing its all-time high last week.
If you read my last XAG/USD analysis, you must remember that I mentioned the possibility of a pullback from the red zone where lies a strong supply zone. The reversal in XAU/USD acted as a catalyst for this rejection.
However, the Silver price prediction has still not flipped bearish, as there is a strong chance of a rebound from the current level. As the price has hit the downward trendline, I expect at least a short-term bounce in the coming days. This will also be subject to the outcome of the FOMC meeting.
