Silver Claws Higher, Investors Await GDP

Silver prices have posted slight gains in Thursday trade. Currently, silver is trading at $17.73, up $0.16 or 0.92% on the day. On the fundamental front, the U.S. will release Advance GDP, the initial estimate for fourth-quarter GDP. The estimate stands at 2.1% and an unexpected reading could affect the movement of silver on Thursday.

Silver Picks Itself Up After Slide

It has been a busy week for silver. The metal took a hard fall on Tuesday, declining 3.4%, its sharpest one-day drop since September. The catalyst for the slide was a sparkling CB Consumer Confidence in January, which lifted risk appetite and weighed on silver and gold prices. However, silver has since reversed directions and recovered some of these losses.

Fed Wants Higher Inflation

As expected, the Federal Reserve stayed pat on Wednesday, holding the benchmark rate at a range between 1.50% and 1.75%. Policymakers did make a minor technical move, raising the IOER rate (interest rate on excess reserves) by 5 basis points, to 1.6%. The IOER is an additional tool that the Fed uses to manage monetary policy. Fed Chair Jerome Powell held a press conference after the decision, and of particular interest were his comments about inflation. Powell said that the Fed expects inflation levels to move closer to the Fed’s target of 2 percent “over the next few months”. Powell added that the “Fed is determined to avoid inflation persistently running below 2%.” This appears to be a hint that rate-setters could hike rates in the near future in order to lift inflation levels.

Silver Technical Analysis

Silver has posted gains on Thursday and broken above the 17.50 line as well as the 50-EMA at 17.68. Above, there is weak resistance at the round number of 18.00. This is followed by resistance at 18.60. On the downside, if silver retraces and breaks below 17.50, the metal could fall to the round number of 17.00.