Silver price has recoiled in the past few days. It has crashed in the past four straight days and is now trading at the lowest level since October 3. This price is about 12% above the lowest level this year, meaning that it has fallen by more than 14% in 2022. XAG/USD has fallen by more than 26% from its highest level this year. Similarly, the SLV stock price has dropped by more than 5.30% from its highest level this year.
US inflation data ahead
Silver price continued its bearish trend as investors focused on the upcoming US inflation data that are set to come out on Thursday. Economists polled by Reuters expect the data to show that the headline consumer inflation dropped from 8.3% to 8.1% in September. Core inflation, which excludes the volatile food and energy prices, is expected to have risen from 6.3% to 6.5%.
Inflation data is important for gold and silver prices because it has a role on the Federal Reserve. Higher inflation usually leads to higher interest rates by the Federal Reserve. The Fed has already hiked by 300 basis points this year and signaled that it will continue doing so in the coming weeks.
The case for a more hawkish Federal Reserve emerged on Friday when the US published the latest jobs numbers. These numbers revealed that the country’s unemployment rate dropped to 3.5% even as the hiring rate dropped. Therefore, analysts expect that the Fed will hike by another 125 basis points in November and December.
Silver price will also react to the latest economic data from China, its biggest market. China will publish the latest inflation and trade numbers on Thursday. The US will also publish the latest retail sales numbers on Friday.
Silver price forecast
The hourly chart shows that silver price has been in a downward trend in the past few days. It has managed to fall from last week’s high of $21.20. The metal’s price also retreated below the important support level at $19.91, which was the lowest level on October 5.
Silver has crashed below the 25-day moving average while the Relative Strength Index (RSI) and the MACD have continued falling. Therefore, the XAG/USD price will likely continue falling ahead of the upcoming US inflation data. A move above the resistance at $19.92 will invalidate the bearish view.
SLV stock price forecast
The hourly chart shows that the SLV share price has been in a strong bearish trend in the past few days. The iShares Silver Trust ETF stock has dropped below the important support at $19.21. It has crashed below the 25-day moving average while the RSI and MACD have been in a downward trend. The stock will likely continue falling as sellers target the next key support at $18.