Silver prices advanced toward $58.80 per ounce on Thursday, rising approximately 1.7% as softer US inflation data and weaker-than-expected economic growth pressured the US Dollar [1]. The US Core Personal Consumption Expenditures (PCE) Price Index increased by 0.1% month-over-month in June, falling short of the 0.2% market forecast and decelerating from the previous 0.3% rise. On an annual basis, core inflation eased to 3.3% from 3.4% [1]. Headline PCE declined 0.1% month-over-month, following a 0.5% increase previously, while the annual rate slowed to 3.7% from 4.1% [1].
These softer inflation readings have reinforced expectations that the Federal Reserve could adopt a less restrictive monetary policy stance if price pressures continue to moderate [1]. Meanwhile, US economic growth also disappointed, with Gross Domestic Product (GDP) expanding at an annualized rate of 1.5% in the second quarter, below expectations of 2.1%. However, the GDP Price Index surged 6.3%, well above the 3.6% forecast, indicating that some inflationary pressures remain elevated [1].
From a technical perspective, XAG/USD trades at $58.76, maintaining a modest bullish bias as it remains above both the 100-period Simple Moving Average (SMA) at $58.10 and the 20-period SMA at $57.76. The pair has reclaimed nearby horizontal support at $58.66, while the Relative Strength Index (RSI) around 57 suggests improving but not overstretched bullish momentum [1]. Immediate resistance is seen at $58.94, with a subsequent barrier at $59.26; a sustained break above these levels could lead to a deeper extension of the current recovery phase [1].
CONCLUSION
Softer US inflation and weaker GDP growth have fueled a rally in silver prices, as market participants anticipate a potentially less restrictive stance from the Federal Reserve. Technical indicators point to a modestly bullish outlook for silver in the near term, with key resistance levels in focus.