Will US CPI Data Trigger Silver Selloff?
Wednesday’s Consumer Price Index report looms large for precious metals, with markets pricing roughly 50 basis points of Fed cuts by year-end. Gold’s technical picture offers key insights for silver traders, as XAU/USD defends crucial support above $3,310.48 while the dollar index holds steady below 99.00. A hotter-than-expected inflation print could pressure both metals, while softer data would reinforce their appeal as hedges against monetary easing.
Silver’s correlation with gold remains strong, particularly during risk-off periods. Gold’s 50-day moving average at $3,269.90 has provided reliable support for months, suggesting similar technical levels may emerge for silver if profit-taking accelerates.
Extended trade negotiations in London between Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are addressing complex issues beyond tariffs, including chip export controls and rare earth access. Unlike previous tariff-focused meetings, these talks could produce meaningful progress that tempers safe-haven demand across precious metals.
Treasury yields slipped Monday as the 10-year dropped 2.6 basis points to 4.482%, while the 2-year fell nearly 4 basis points to 4.005%. Any breakthrough in trade relations could reduce geopolitical risk premiums embedded in silver and gold prices.
Global Rate Divergence Supports Silver Bulls Despite Profit-Taking
Rate expectations are diverging globally, with the Bank of England facing pressure to cut sooner due to weakening UK labor data, while the Bank of Japan delays further hikes. This mixed central bank outlook, combined with lingering trade uncertainty, keeps risk appetite subdued and supports underlying precious metals demand.
Silver’s technical setup mirrors gold’s broader strength. While the white metal faces immediate resistance at psychological levels of $37.00, $38.00, and the major $40.00 round number, downside support emerges at former tops of $35.40 and $34.87.
