Silver Prices Stalled by Firm Dollar Ahead of PPI Report
Silver prices pulled back on Thursday as the US dollar firmed to a two-week high, despite contained consumer price inflation (CPI) and lower rate hike odds. The Producer Price Index (PPI) report at 12:30 GMT will determine whether buyers get another shot at $66.80.
The rally in silver stalled right at the midpoint between the 50-day and 200-day moving averages, and the contract is back below that pivot this morning. Spot silver was trading at $64.90, down $0.43 or 0.65% from Wednesday's high of $66.80.
The CPI report on Wednesday showed a 0.1% increase in consumer prices for July, with core inflation cooling to 2.5% annually. This eased rate hike expectations, pushing September odds below 40%. However, the dollar near a two-week high is raising concerns about silver's rally.
The PPI report will be crucial in determining whether buyers get another chance at $66.80. A firm dollar and higher producer prices could extend the pullback in silver. The Fed still has three policymakers who voted for a hike at the last meeting, and inflation data arriving this week is either going to isolate them or give them company.