Silver rises as softer US inflation weighs on US Dollar

• Silver gains around 1.7% and trades near $58.80 per ounce.
• US Core PCE inflation rises only 0.1% MoM, below the 0.2% market forecast.
• Slower US economic growth and broad US Dollar weakness support demand for precious metals.

Silver prices advance toward $58.80 per ounce on Thursday, gaining around 1.7% as softer United States inflation data and weaker-than-expected economic growth place pressure on the US Dollar.

The US Core Personal Consumption Expenditures Price Index rose 0.1% MoM in June, below the 0.2% market forecast and slowing from the previous 0.3% increase. On an annual basis, underlying inflation eased to 3.3% from 3.4%.

Headline PCE declined 0.1% on the month, following a 0.5% increase previously, while the annual rate slowed to 3.7% from 4.1%. The softer inflation readings reinforced expectations that the Federal Reserve (Fed) could adopt a less restrictive monetary policy stance if price pressure continues to moderate.

US economic growth also disappointed. Gross Domestic Product (GDP) expanded 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 pressure remains elevated.

Short-term technical analysis:

On the 4-hour chart, XAG/USD trades at $58.76, holding a modest bullish bias as it stays above both the 100-period Simple Moving Average (SMA) at $58.10 and the 20-period SMA at $57.76. The pair has also reclaimed nearby horizontal support at $58.66, while the Relative Strength Index (RSI) around 57 hints at improving but not overstretched bullish momentum.

On the downside, initial support is seen at $58.66, followed by $58.53, before the 100-period SMA at $58.10 and the 20-period SMA at $57.76 underpin the broader structure. On the topside, immediate resistance aligns at $58.94, with a subsequent barrier at $59.26; a sustained break above these caps would open the way for a deeper extension of the current recovery phase.

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