Silver Pulls Back Ahead of US Inflation Data, Rate-Cut Hopes Remain
Silver prices have retreated from their two-week high as traders await the upcoming US core PCE price index report, a key inflation gauge for the Federal Reserve. The pullback comes after a strong rally in recent weeks, driven by growing expectations that the Fed will begin cutting interest rates.
The core PCE price index is forecast to show a 2.6% year-over-year increase for January, according to consensus estimates. A higher-than-expected reading could dampen rate-cut hopes, putting pressure on silver and other metals.
Despite the near-term retreat, several factors continue to underpin silver prices. Physical demand remains robust, particularly from the solar panel industry, while geopolitical tensions and concerns over global economic growth have sustained safe-haven buying.
The metal's underlying support from rate-cut bets and industrial demand suggests that any dip may be short-lived. Traders will closely watch the inflation report for direction, with a soft print likely to reignite the bullish narrative.