Silver (XAG/USD) experienced selling pressure on Wednesday, trading around $67.79 and declining nearly 1.26% on the day, as the US Dollar strengthened following the release of the latest United States inflation data [1]. The headline Personal Consumption Expenditures (PCE) Price Index rose 0.2% month-over-month in July, surpassing the 0.1% forecast, while the annual rate remained steady at 3.7%, exceeding expectations of 3.6% [1]. Core PCE inflation increased by 0.2% month-over-month and 3.3% year-over-year, in line with market expectations [1].
The upside surprise in headline inflation provided a modest lift to the US Dollar, with the US Dollar Index (DXY) trading around 99.20, up nearly 0.30% on the day [1]. Despite this, expectations for the Federal Reserve's September meeting remained largely unchanged, as traders focused on the in-line core inflation readings. According to the CME FedWatch Tool, markets see a roughly 65% chance that the central bank will leave interest rates unchanged next month, which could help prevent a deeper decline in silver prices [1].
From a technical perspective, XAG/USD holds above the 50-day Simple Moving Average (SMA) but remains capped by the 100-day and 200-day SMAs, indicating a neutral-to-bullish near-term bias. The Relative Strength Index (RSI) stands at 60, reflecting positive momentum without reaching overbought territory, while the MACD indicator remains above zero [1]. Immediate resistance is noted at the 38.2% Fibonacci retracement at $68.02 and the 100-day SMA at $68.31, with further resistance at $72.10 (50.0% retracement) and $72.31 (200-day SMA) [1]. On the downside, support is seen at the 23.6% Fibonacci retracement near $62.98 and the 50-day SMA at $61.32, with a deeper slide exposing the structural low around $54.82 [1].
CONCLUSION
Silver prices declined as the US Dollar strengthened on higher-than-expected headline inflation data, though core inflation matched forecasts and market expectations for Fed policy remained steady. Technical indicators suggest a neutral-to-bullish bias, with key resistance and support levels in focus. Overall, the market reaction was moderate, with traders awaiting further signals from upcoming economic data and central bank decisions.