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Silver Gains Ground, CPI Slips

Silver Pushes higher, U.S. inflation Reports Mixed. Investors Await Retail Sales
Kenny Fisher
Silver daily chart, September 11, 2019

Silver has gained ground on Thursday. In the North American session, XAG/USD is trading at $18.33, up 1.2% on the day.  These are the strongest gains we’ve seen in a week and could signal a breakout for the metal.

CPI Within Expectations, Retail Sales Next

Silver has shown considerable upward movement on Thursday. Will this trend continue? That could well depend on investor reaction to U.S. inflation and retail sales reports for August. On Thursday, inflation releases were mixed. CPI slipped to 0.1%, down from 0.3%. Still, the headline release matched the estimate. Core CPI remained steady at 0.3%, edging above the estimate of 0.2%.

We’ll get a look at consumer spending on Friday, with the release of retail sales reports of August. The markets are bracing for soft numbers. Retail sales are expected to drop to 0.2%, down from 0.7% a month earlier. The core release is forecast to slow to 0.1%, after a sparkling gain of 1.0% in July.

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Safe Haven Status for Silver

Traders should keep in mind that investors have been treating silver as a save-haven asset (much like gold), and this stance has been especially notable over the past few months. Both commodities have benefited from escalating trade tensions between the U.S. and China, as well as the dovish stance of major central banks worldwide, especially the Federal Reserve. In a summer which saw plenty of turmoil in the markets, investors have snapped up silver, which has surged some 24% since June 1.

Technical Analysis

With the gains made on Thursday, silver is fast approaching an important resistance line at 18.60. If XAG/USD can break past this line, there is room for the pair to climb back into 19-territory. The next resistance line is at 19.50.  On the downside, support has strengthened at the round number of 18.00.

XAG/USD 4-Hour Chart
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