Silver Surges on Weaker Dollar, Eyes on US CPI Data

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Silver prices (XAG/USD) are climbing towards a two-week high of $28.80 in Tuesday’s trading session. This uptick coincides with a decline in the US Dollar.

Stubborn US PPI Data Fails to Dent Silver:

  • The US Producer Price Index (PPI) report for April came in stronger than expected, suggesting persistent inflationary pressures.
  • Despite this, the US Dollar weakened, potentially due to concerns about the Fed delaying rate cuts.

Weaker Dollar Boosts Silver:

  • A declining Dollar makes Silver cheaper for investors holding other currencies, increasing its appeal.

Falling Treasury Yields Add Tailwind:

  • The 10-year US Treasury yield has dipped further, reducing the opportunity cost of holding non-yielding assets like Silver.

US CPI Data in Focus:

  • The key event for Silver this week is the release of US Consumer Price Index (CPI) data for April on Wednesday.
  • A higher-than-expected CPI reading could further weaken the Dollar and bolster Silver prices.

Technical Analysis: Silver Hints at Bullish Momentum

  • Silver has recovered significantly after finding support near $26.09.
  • It is currently approaching its multi-year high of $28.80.
  • The price has moved above the 20-period EMA, indicating a potential shift towards a bullish trend.
  • The RSI has entered the 60.00-80.00 range, further suggesting bullish momentum.

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