Silver (XAG/USD) Holds Above $66 as CPI Risk Puts $68.50 Break in Focus
Silver prices edged higher in early European trading, holding near $66.50 as markets positioned cautiously ahead....
Quick overview
- Silver prices rose slightly to around $66.50 as markets await the US Consumer Price Index data.
- Improving risk appetite and expectations for easing rates support silver demand despite a mild rebound in the US dollar.
- Recent labor data indicates a potential need for more accommodative monetary policy, bolstering silver's upside bias.
- Technically, silver remains in a bullish structure, with key support at $65.10 and resistance at $66.95.
Silver prices edged higher in early European trading, holding near $66.50 as markets positioned cautiously ahead of the US Consumer Price Index, the key macro trigger for precious metals today. The modest advance reflects improving risk appetite and easing rate expectations, even as investors avoid aggressive positioning before inflation data is released.
While a mild rebound in the US dollar limited upside momentum, broader fundamentals remain supportive. Cooling US growth signals and rising confidence in Federal Reserve easing continue to underpin demand for non-yielding assets, keeping silver well bid despite near-term consolidation.
Rate-Cut Bets Support Silver’s Upside Bias
Recent US labor data has reinforced the narrative that monetary policy may need to turn more accommodative in the months ahead. Nonfarm payroll growth slowed to 64,000 in November, while the unemployment rate climbed to 4.6%, its highest level in over a year. According to LSEG, futures markets now reflect a growing probability of a rate cut early next year.
Lower real yields typically benefit silver, which combines safe-haven characteristics with industrial demand exposure. As borrowing costs ease and growth expectations soften, silver often outperforms during late-cycle transitions.
Markets are now focused on CPI expectations:
- Headline CPI: 3.1% year-on-year
- Core CPI: 3.0% year-on-year
Any downside surprise could accelerate rate-cut pricing and provide fresh upside momentum for XAG/USD.
Technical Outlook: Trend Remains Constructive
From a technical standpoint, silver is trading within a clear bullish structure, holding firmly above the $65.10 support zone, which now acts as a key demand area following the recent breakout.
Price remains comfortably above:
- 50-EMA: $64.36
- 100-EMA: $62.60
This moving-average alignment confirms trend strength, with buyers stepping in on shallow pullbacks rather than allowing deeper retracements. Recent candles show smaller bodies near highs, signaling consolidation rather than exhaustion.
Key technical levels:
- Resistance: $66.95, then $68.17
- Support: $65.10, followed by $63.82
RSI is hovering near 65, reflecting strong momentum without extreme overbought conditions. As long as silver holds above $65, the broader bias favors continuation rather than reversal.
Silver (XAG/USD) Short-Term Bias: Buy Pullbacks While Above $65
Silver’s structure suggests the market is digesting gains ahead of CPI rather than rolling over. A clean break above $66.95 would open the door toward $68.50, while only a sustained move below $63.80 would begin to challenge the bullish setup. For now, buyers remain in control.
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