Silver prices are inching higher, supported by technical strength and softer inflation data. After breaking above key levels at $30.53 and $30.45, silver has gained upside momentum. These levels pave the way for a potential move toward $31.81, followed by the December 12 peak at $32.33.
A breakout above this level could ignite a rally toward $34.35-$35.40. At 11:53 GMT, silver is trading at $30.81, up $0.14 or +0.44%. Today’s U.S. Retail Sales report could be pivotal in determining whether silver can maintain its recent momentum or face near-term resistance.
The upcoming Retail Sales data, scheduled for release at 13:30 GMT, is expected to have significant implications for the U.S. dollar and silver prices. Core Retail Sales, excluding autos, are expected to rise by 0.5%, while the broader figure is forecasted at 0.6%. Better-than-expected data could strengthen the dollar and cap silver’s gains.
The recent Consumer Price Index (CPI) report showed inflation moderating to 2.9%, with core inflation easing to 3.2%. This has increased market expectations for potential Federal Reserve rate cuts later in the year, which could favor silver prices.
Silver continues upward amid softer inflation
Easing geopolitical tensions, such as the recent Israel-Hamas ceasefire, and flat U.S. Treasury yields have somewhat limited silver’s safe-haven demand. Silver’s outlook depends heavily on today’s Retail Sales report. Weaker sales data could dampen economic confidence, weaken the dollar, and enhance silver’s safe-haven appeal.
Conversely, stronger retail figures could bolster the dollar, exerting pressure on silver prices. Recent inflation data has bolstered the case for a more dovish Federal Reserve. Core inflation rose 3.2% year-over-year in December, slightly below forecasts, which alongside softer monthly inflation figures, has led interest rate futures to reflect near-even odds of two rate cuts by year-end 2025.
A dovish Fed outlook reduces the opportunity cost of holding non-yielding assets like silver, supporting its appeal. Silver could see further gains if today’s Retail Sales data falls short of expectations, likely weakening the dollar. Traders eye $31.81 and $32.33 as crucial resistance levels.
A breakout above $32.33 could trigger a sharp move toward $34.35-$35.40. However, any upside momentum will be closely tied to U.S. economic data and Federal Reserve policy signals.