Silver Price Prediction – Prices Rise Higher on Strong PCE

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Silver prices continued to recover as the dollar fell. Treasury yields were higher but did not support the greenback. Gold prices were also higher, helping to enhance the precious metal complex. Since the price of silver is in US dollars, a weaker US currency makes money cheaper in other currencies. Stronger-than-expected core inflation levels continue to rise

Technical analysis

Silver prices continued to recover on Monday. Target support is June 2020 low at 16.25. Short term support on silver prices is near the recent breakdown level at 22.04. Resistance is near the 50 day moving average at 23.68. Short-term momentum turned positive as the Rapid Stochastic generated a cross buy signal. Medium term momentum turned positive as the MACD (Moving Average Convergence Divergence) generated a cross buy signal. This happens when the MACD line (the 12 day moving average minus the 26 day moving average) crosses above the MACD signal line (the 9 day moving average of the MACD line).

Rise in core inflation

Basically, PCE prices rose 0.4% for the month and 4.3% year-on-year, the highest since January 1991. This reflects a 24.9% increase in energy prices and a 2.8% increase in food. The Fed’s preferred inflation indicator rose in September and continued to show strength. The price index for basic personal consumption expenditure, excluding food and energy costs, was up 0.3% for the month and 3.6% from a year ago. The monthly gain was slightly above the 0.2% expected and above the annual consensus forecast of 3.5%.

This article originally appeared on FX Empire

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