Silver Price Prediction – Prices Grind Higher on Strong PCE

Silver prices continued to rally as the dollar slipped. Treasury yields were higher but failed to buoy the greenback. Gold prices were also higher, helping to lift the precious metals complex. Since silver is priced in U.S. dollars, a weaker U.S. currency makes silver less expensive in other currencies. Stronger than expected core inflation levels continue to move higher

Technical Analysis

Silver prices continued to rally on Monday. Target support are the June 2020 lows at 16.25. Short-term support on silver prices are seen near the recent breakdown level at 22.04. Resistance is seen near the 50-day moving average at 23.68. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) generated a crossover buy signal. This occurs as 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).

Core Inflation Rises

On a headline basis, PCE prices rose 0.4% for the month and 4.3% year over year, the highest since January 1991. That reflected a 24.9% increase in energy prices and a 2.8% rise in food. The Fed’s favored gauge of inflation increased in September and continued to show strength. The core personal consumption expenditures price index, excluding food and energy costs, increased 0.3% for the month and was up 3.6% from a year ago. The monthly gain was slightly higher than the 0.2% expected and higher than the consensus annual forecast of 3.5%.