XAG / USD hits new three-month high above $ 25.00

  • XAG / USD rallies as US inflation soars, its biggest jump in 30 years.
  • XAG / USD climbed $ 0.80 as the news headlines grabbed the headlines.
  • The 5-year US real yield measure fell from -1.85% to -1.941%, weighing on the US dollar.

The price of silver (XAG / USD) skyrocketed as the Bureau of Labor Statistics (BLS) revealed that the October Consumer Price Index, a U.S. measure of the prices paid by consumers, had risen 6.2%, more than the 5.4% jump in inflation in September. , and the largest since 1990. That said, the unproductive metal rose nearly 3%, trading at $ 25.01 at the time of writing.

XAG / USD responded with a price hike of $ 0.80, from $ 24.20 to $ 25.00, once the news broke through the wires. The price rebound left September and October highs at $ 24.87 and $ 24.82 respectively, which could now serve as support areas going forward.

The consumer price index in the United States rose 6.2%, the largest figure since 1990

In the US Economic Record, the Bureau of Labor Statistics (BLS) found that the Consumer Price Index (CPI) jumped 6.2% on an annual basis, from 5.4% in September, leaving behind estimates of 5.3% by economists. . Additionally, the core CPI reading, which excludes volatile items like energy and food, rose 4.6% over the same period, above the market forecast 4.8%. .

Meanwhile, the benchmark 10-year U.S. Treasury bond rating rose nearly seven basis points, recouping some of its weekly losses, settling at 1.517%, supporting demand for the greenback. The US dollar index, a measure of the dollar’s value relative to its peers, rose 0.67%, currently trading at 94.59.

But why do the prices of silver keep rising? The answer is that real returns, the difference in interest rates minus inflation, go down. The US 5-year TIPS, a measure of real returns, fell from -1.85% to -1.941%, the second lowest since July 2021, according to Reuters.

XAG / USD price prediction: technical outlook

Daily graph

The white metal has a short-term bullish bias as evidenced by the shorter-term Daily Moving Averages (DMA) below the spot price, but the 200-DMA stands at $ 25.38 which would be a strong resistance to overcome for silver bulls. Despite the above, the Relative Strength Index (RSI) at 67 still has enough room before reaching overbought conditions, indicating that XAG / USD could print another head start.

As mentioned in the previous paragraph, the 200-DMA at $ 25.38 would be the first level of resistance in the result of another push higher. A breach above that level could open the door for the bulls to attack the $ 26.00 area, which would then expose the $ 27.00 figure to be broken.

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