Silver Prices Slump as Stronger US Dollar Pushes Back Gains
The price of silver (XAG/USD) has come under selling pressure due to a strengthening US Dollar, which rose 0.3% on Wednesday following the latest inflation data from the United States.
The Personal Consumption Expenditures (PCE) Price Index rose 0.2% month-over-month in July, exceeding expectations of 0.1%, while the annual rate held steady at 3.7%, surpassing predictions of 3.6%. The core PCE inflation increased 0.2% MoM and 3.3% YoY, matching market forecasts.
Despite the upside surprise in headline inflation giving the US Dollar a modest boost, the data had little impact on expectations for the Federal Reserve's (Fed) September meeting. According to the CME FedWatch Tool, markets still see a roughly 65% chance that the central bank will leave interest rates unchanged next month.
The technical analysis suggests a neutral-to-bullish near-term bias for silver prices, as they hold above the 50-day Simple Moving Average (SMA) but remain capped by the 100-day and 200-day SMAs. The Relative Strength Index (RSI) stands at 60, showing positive momentum without entering overbought territory.