• Silver price climbs to near $31.00 as traders reassess Fed monetary policy outlook after mixed US inflation data.
• Traders expect the Fed to cut interest rates twice this year.
• Silver price attempts to break above the upward-sloping trendline around $30.85.

Silver price (XAG/USD) moves higher to near $31.00 in Thursday’s European session. The white metal gains as traders have raised bets supporting the Federal Reserve (Fed) to deliver more than one interest rate cut this year.

According to the CME FedWatch tool, traders are pricing in two interest rate cuts this year, the first coming in June instead of September, as forecasted before the December inflation data were released.

As measured by the Consumer Price Index (CPI), headline inflation accelerated to 2.9%, as expected; however, the core reading—which excludes volatile food and energy prices—surprisingly rose at a slower pace of 3.2%.

Typically, signs of acceleration in Fed dovish bets bode well for non-yielding assets, such as Silver.

Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, ticks higher to near 109.00 but has corrected from the two-year high of 110.00. 10-year US Treasury yields edge higher to near 4.66% but have come down from its yearly high of 4.80%.

Silver technical analysis

Silver price gathers strength to break above the upward-sloping trendline around $30.85, which is plotted from the 29 February 2024 low of $22.30 on a daily timeframe.

The white metal rebounded strongly after discovering strong buying interest near the 200-day Exponential Moving Average (EMA), which is around $29.45. It then climbed above the 20-day EMA, which is around $30.00, suggesting a bullish near-term trend.

The 14-day Relative Strength Index (RSI) jumps to near 60.00. A fresh bullish momentum would trigger if its manages to break above 60.00.

Silver daily chart

The EURUSD price didn’t show any strong move since this morning, to continue fluctuating around the EMA50, thus, no change to the expected bearish trend scenario for today, which depends on the price stability below 1.0325$, while its targets begin at 1.0220$ and extend to 1.0100$ after breaking the previous level.

The expected trading range for today is between 1.0200$ support and 1.0360$ resistance

Trend forecast: Bearish

The AUDUSD price managed to touch the main bearish channel’s resistance line, and begins to rebound bearishly to attempt to build bearish wave on the intraday and short-term basis, on its way to achieve negative targets that start at 0.6140$ and extend to 0.6075$.

Note that breaking 0.6200$ will complete forming bearish flag pattern that reinforce the expectations to decline in the upcoming period, while breaching 0.6245$ will stop the bearish trend and lead the price to start bullish correction on the intraday and short-term basis.

The expected trading range for today is between 0.6160$ support and 0.6260$ resistance

Trend forecast: Bearish

• Gold price consolidates gains near $2,700, with eyes on US Retail Sales data.
• Tame US inflation data revive aggressive Fed rate cut talks, undermining the US Dollar and Treasury bond yields.
• Gold price looks north amid a bullish technical setup on the daily chart.

Gold price is trading close to the highest level in five weeks just above $2,700 in Thursday’s Asian trading. Traders look forward to a fresh batch of US economic data for the next leg higher in Gold price.

Attention turns to US Jobless Claims and Retail Sales data

This week’s tame inflation data from the US brought back expectations of interest rate cuts by the US Federal Reserve (Fed) on the table, which provided extra legs to the correction in the US Dollar (USD) and the US Treasury bond yields from multi-month highs. This accentuated the Gold price upside, with buyers briefly recapturing the $2,700 in early Asian trades this Thursday.

Traders piled up bets on a Fed rate cut in June, pricing in rising odds of a second rate reduction in 2025 after inflation data. The report indicated the recent market expectations of pricing out of rate cuts this year were excessive.

US Consumer Price Index (CPI) advanced in line with estimates at an annual rate of 2.9% in December from November’s 2.7%. But core CPI, which excludes food and energy prices, rose by 3.2%, below forecasts for 3.3%. On Tuesday, the US annual PPI rose 3.3% in December, missing the expected 3.4% growth, while the core PPI inflation rose to 3.5% year-on-year (YoY) in the same period, compared to the market forecast of 3.8%.

The dovish Fed expectations, Chinese stimulus hopes and fading concerns  over US President-elect Trump’s disruptive trade tariffs support the prevalent risk-on market mood, keeping the safe-haven US Dollar broadly subdued and Gold price at higher levels.

Looking ahead, the focus shifts to more economic data releases from the US, including the December Retail Sales and the weekly Jobless Claims, which will provide more clarity on the Fed’s interest rate trajectory beyond January. Markets have fully priced in a rate-pause decision at the Fed’s policy meeting later this month. Gold price will also remain at the mercy of any speculations surrounding Trump’s tariff plans.

Gold price technical analysis: Daily chart

The short-term technical outlook for Gold price continues to support Gold buyers, courtesy of last week’s symmetrical triangle breakout.

The 14-day Relative Strength Index (RSI) points higher above the midline, currently near 60, suggesting that Gold price remains a ‘buy-the-dips’ trade in the coming days.

Gold price must seek a daily candlestick closing above the $2,700 barrier to initiate a fresh uptrend toward the $2,750 psychological level.

Ahead of that level, the December 12 high of $2,726 will challenge bearish commitments.

Conversely, strong support is located at the January 15 low of $2,670, below which sellers must crack the $2,640 demand area.

That zone is the confluence of the 21-day Simple Moving Average (SMA), 50-day SMA, 100-SMA and the triangle convergence, making it a powerful support.

If the downside momentum accelerates, the January 6 low of $2,615 could come to buyers’ rescue.

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• Silver climbs, breaching 200-day SMA at $29.98, enhancing buying momentum.
• Major resistance at $31.00; break could aim for December 12 high of $32.32.
• Pullback below 50-day SMA might prompt retest of 200-day SMA, down to $28.74.

Silver’s price stages a comeback, rising above the 50-day Simple Moving Average (SMA) at $30.32 and eyeing a break of the 100-day SMA. At the time of writing, the XAG/USD trades at $30.64, having gained over 2.64% on Wednesday.

XAG/USD Price Forecast: Technical outlook

On its way toward its current price, XAG/USD cleared the 200-day SMA at $29.98, which exacerbated the upward move. Yet buyers need to clear the 100-day SMA at $30.82 so Silver can extend its gains.

Momentum favors further upside, yet consolidation lies ahead as the Relative Strength Index (RSI) is flat, but above the latest peak.

If buyers clear the 100-day SMA, $31.00 emerges as the next key resistance level. A break above this level opens the door to testing the latest cycle high at $32.32, the December 12 daily high.

On the other hand, if sellers step in and push XAG/USD below the 50-day SMA, it could pave the way towards $29.98, the 200-day SMA. On further weakness, the next stop would be December’s 19 swing low of $28.74.

XAG/USD Price Chart – Daily

Brent oil price attempted to rise but it declines again to keep the correctional bearish scenario active for today, waiting to visit 79.404 as a first station, which breaking it represents the key to extend the bearish wave towards 77.83$ areas.

Therefore, our bearish overview will remain valid and active unless breaching 81.00$ and holding above it.

The expected trading range for today is between 78.40$ support and 81.40$ resistance.

Trend forecast: Bearish

XAU/USD Current price: $2,692.42

• A better market mood puts pressure on US Treasury yields and the Greenback.
• The December United States Consumer Price Index came in line with market’s expectations.
• XAU/USD maintains its bullish strength and aims to extend gains towards record highs.

Spot Gold peaked at $2695.96 on Wednesday, helped by a bout of risk appetite. The upbeat sentiment was a combination of encouraging United States (US) earnings reports and the country’s Consumer Price Index (CPI) report. On the one hand, major US banks reported results that exceeded expectations. Goldman Sachs’ profits doubled in Q4, while JP Morgan announced that large asset and wealth management grew in the same period.

Inflation in the US, as measured by the change in the CPI rose 2.9% on a yearly basis in December from 2.7% in November, the US Bureau of Labor Statistics (BLS) reported, matching expectations. When compared to the previous month, the CPI was up 0.4%, after adding 0.3% in the previous month. The annual core CPI, which excludes volatile food and energy prices, rose 3.2%, below the expected 3.3%. The news sent stocks skyrocketing and bond yields lower as investors lifted bets on the Federal Reserve’s (Fed) upcoming rate cuts.

The macroeconomic calendar will have little to offer in the upcoming days, beyond US Retail Sales scheduled for Thursday. Sales are expected to have grown by 0.6% in December after adding 0.7% in November.

XAU/USD short-term technical outlook

The daily chart for XAU/USD shows it trades around $2,690 maintaining the bullish tone, as it keeps developing above all its moving averages, although the 20 Simple Moving Average (SMA) and the 100 SMA converge around $2.635 with no directional strength,  yet acting as dynamic support. At the same time, technical indicators head north within positive levels, reflecting buyers still hold the grip.

In the near term, and according to the 4-hour chart, Gold is neutral-to-bullish. The XAU/USD quickly recovered after a dip towards a flat 20 SMA, currently providing dynamic support at around $2,677. The longer moving averages post tepid advances below the shorter one. Technical indicators, in the meantime, lack directional strength, with the Momentum indicator stuck to its 100 level and the Relative Strength Index (RSI) indicator easing at around 60.

Support levels: 2,675.00 2,660.70 2,645.15  

Resistance levels: 2,697.90 2,725.00 2,738.15

• Silver gains positive traction for the second straight day, though the upside seems limited.
• The recent decline along a descending channel points to a well-established downtrend.
• Neutral oscillators on the daily chart further warrant some caution for bullish traders. 

Silver (XAG/USD) attracts some buyers for the second straight day and climbs back above the $30.00 psychological mark during the first half of the European session on Wednesday. The technical setup, however, warrants some caution for bullish traders and before positioning for any further appreciating move.

The recent pullback from the vicinity of the $35.00 mark, or a multi-year peak touched in October, has been along a descending channel, which points to a well-established downtrend. Moreover, oscillators on the daily chart – though have recovered from bearish territory – are yet to gain positive traction. Hence, any subsequent move up might continue to confront some hurdle near the top boundary of the said channel, around the $30.45 region. 

This is followed by the 100-day Simple Moving Average (SMA), currently pegged ahead of the $31.00 round figure. A sustained strength beyond the latter will suggest that a nearly three-month-old corrective decline has run its course and pave the way for further gains. The XAG/USD might then accelerate the positive move towards the $31.70 intermediate hurdle en route to the $32.00 mark and the December swing high, around the $32.30-$32.35 region. 

On the flip side, the weekly trough, around mid-$29.00s touched on Monday, could offer immediate support. A convincing break below will reaffirm the negative setup and make the XAG/USD vulnerable to weaken further below the $29.00 mark, towards retesting the $28.75-$28.70 support, or a multi-month low touched in December. Some follow-through selling will be seen as a fresh trigger for bearish traders and pave the way for a further depreciating move.

Silver daily chart

Brent oil price attempted to rise but it declines again to keep the correctional bearish scenario active for today, waiting to visit 79.404 as a first station, which breaking it represents the key to extend the bearish wave towards 77.83$ areas.

Therefore, our bearish overview will remain valid and active unless breaching 81.00$ and holding above it.

The expected trading range for today is between 78.40$ support and 81.40$ resistance.

Trend forecast: Bearish