Silver Price Forecast: Stronger-than-expected US CPI pushes XAG/USD lower

Silver retreats as the US Dollar and Treasury yields gain on higher-than-forecast US inflation.
Expectations of additional interest rate hikes firm up following hawkish remarks from Fed officials.
The bearish outlook for XAG/USD persists, with prices holding below the 21-day, 100-day and 200-day SMAs.

Heavy selling weighs on Silver (XAG/USD) on Tuesday, leaving it around $51.23 at the time of writing, a decline of 3.97% on the day. The pressure follows higher-than-forecast US inflation, which has strengthened the US Dollar (USD) and driven US Treasury yields upwards.

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October's US Consumer Price Index (CPI) increase of 0.4% MoM exceeded the 0.3% forecast, though it was lower than September's 0.6% rise. Excluding food and energy, core CPI advanced 0.3%, outpacing expectations of 0.2% and matching the increase recorded in September.

Hawkish remarks from Dallas Fed President Lorie Logan added to the selling pressure. She said the Federal Reserve (Fed) needs “at least two more 25-basis-point (bps) rate increases” and that it “may be possible to move more rapidly this winter.” Ahead of the data release, Fed Governor Christopher Waller had said that a half-point rate hike might be necessary in December if October core CPI registered “around 0.3% or higher.”

Traders are now pricing in an 89.2% probability of a 25-bps rate hike in December, with a 10.8% chance of a larger 50-bps increase, according to the CME FedWatch Tool. Silver continues to face pressure from expectations of additional Fed tightening, since higher interest rates increase the opportunity cost of holding assets that offer no yield. The metal's appeal to investors is also diminished by higher US Treasury yields and a firmer Greenback.

Technical outlook: Can Silver Find Support?

Trading below its 21-day, 100-day and 200-day simple moving averages (SMAs), XAG/USD retains a distinctly bearish bias on the daily chart. A Relative Strength Index (RSI) reading near 38 reflects continued weakness. Although the Moving Average Convergence Divergence (MACD) has edged into positive territory, it suggests only a limited attempt at stabilisation, not a confirmed bullish reversal.

The horizontal level near $50 offers immediate support, with the year-to-date low of $48.62 next in focus. If that low gives way, losses could extend further.

Any recovery would first face resistance at the 21-day SMA around $54 and then the horizontal barrier at $55. Further up, the 100-day SMA at $60.50 and the horizontal level at $65 stand ahead of the longer-term 200-day SMA near $68.60. Together, these levels form a broad overhead supply zone; prices would need to reclaim it to relieve the prevailing bearish pressure.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

How Is the US Dollar Performing Today?

The US Dollar recorded its strongest performance against the Australian Dollar today. The table below sets out the percentage changes in the US Dollar (USD) against the major currencies listed.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.64%	0.87%	0.57%	0.54%	1.16%	0.79%	0.86%
EUR	-0.64%		0.22%	-0.05%	-0.09%	0.51%	0.15%	0.22%
GBP	-0.87%	-0.22%		-0.30%	-0.31%	0.29%	-0.08%	-0.00%
JPY	-0.57%	0.05%	0.30%		-0.04%	0.57%	0.20%	0.28%
CAD	-0.54%	0.09%	0.31%	0.04%		0.61%	0.24%	0.31%
AUD	-1.16%	-0.51%	-0.29%	-0.57%	-0.61%		-0.37%	-0.29%
NZD	-0.79%	-0.15%	0.08%	-0.20%	-0.24%	0.37%		0.08%
CHF	-0.86%	-0.22%	0.00%	-0.28%	-0.31%	0.29%	-0.08%

To read the heat map of percentage movements between major currencies, select the base currency in the left-hand column and the quote currency in the top row. For instance, choosing the US Dollar on the left and following its row across to the Japanese Yen gives the percentage change for USD (base)/JPY (quote) in the corresponding cell.