Silver price is finding resistance at $27.50 ahead of the US inflation data. As a hedge against inflation, silver tends to have an inverse relation with the greenback. On Tuesday, the US dollar dropped to 90.04 after hitting an intraday high of 90.35. Since Thursday last week, the currency has dropped by about 1.47%.
Investors are now keen on the US consumer price index (CPI) and retail sales data scheduled for Wednesday and Friday respectively. According to the US Bureau of Labor Statistics, the core consumer prices rose by 0.3% in March. This is the highest number since August 2020. Analysts expect April’s core CPI to remain unchanged from last month’s reading.
On Friday, the Census Bureau is set to release US retail sales. The figure, which is another measure of inflation, skyrocketed in March by coming in at 8.4%. The number was the highest since May 2020. As the impact of the $1.9 trillion stimulus package begins to fade, analysts expect core retail sales to rise by 0.7% in April MoM.
Silver price is also reacting to the rebounding US bond yields. On Tuesday, the benchmark 10-year US treasury yields rose by 0.9% to 1.61. On Friday, the yields dropped to 1.48, the lowest level since 11th March. Notably, high bond yields are a bearish catalyst for silver price.
Silver price technical outlook
Silver price has been wavering between 27.53 and 27.13 in Tuesday’s session. At the time of writing, it was up by 0.36% at 27.41. Notably, it is finding resistance at 27.50 as the bulls target the 12-week high of 27.88 that it hit on Monday. On a three-hour chart, it is trading along the 14-day exponential moving average and slightly above the 28-day EMA.
I expect silver price to remain range-bound between 27.53 and 27.13 in the near term. A move above the current upper limit will place the next target at 27.88. However, this thesis will be invalidated by a move below 27.00.