Silver is calm on Wednesday, but that could change in the North American session, with the release of consumer inflation and the Federal Reserve rate decision.
Silver prices are steady in the Wednesday session. In the European session, silver is trading at $16.68, up $0.02 or 0.14% on the day. Silver has steadied this week, after declining by 2.3% on Friday and touching a 4-month low of 16.51. Since then, the metal has clawed back with small gains. Will we see stronger movement on Wednesday?
The U.S. releases key consumer data for November this week. On Wednesday, we’ll get a look at consumer inflation, followed by retail sales reports on Friday. Inflation levels remain low, with the headline and core releases both expected to post a modest gain of 0.2 percent. Investors are keeping a close eye on inflation indicators, as low inflation means that the Federal Reserve is less constrained with regard to lowering interest rates.
The Federal Reserve will make its rate announcement at 19:00 GMT. It is a given that the Fed will maintain the benchmark rate, with the CME Group setting the odds at 97.8 percent that rate levels remain in place. Investors will be focusing on the rate statement and FOMC projections. The U.S. economy has produced unexpectedly strong data lately, such as GDP and nonfarm payrolls. If the rate statement has a hawkish tone, we could see risk apprehension dip and drag down silver prices.
On the upside, the 200-EMA is at 17.14. This is closely followed by resistance at 17.25. On the downside, the 50-EMA line remains in the candlesticks, at 16.56. This is followed by support at 16.50, which has held firm since August. With the 16.50 line under strong pressure, we could see this line tested shortly.
Kenny is an experienced market analyst, with a focus on fundamental analysis. Kenny has over 15 years of experience across a broad range of markets and assets –forex, indices and commodities.
