Silver (XAG) Forecast: Can Prices Rebound Above $29.96 or Extend Losses on PPI Data?

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Published: Jan 14, 2025, 13:02 GMT+00:00

Key Points:

Silver trades below $29.96, signaling bearish pressure as traders await key inflation data for price direction.
A break above $29.96 could target $30.54, while failure risks a retreat toward $28.74. Key levels dominate silver's outlook.
Inflation concerns persist as silver traders focus on the U.S. PPI report, with major implications for the Fed and markets.
Treasury yields near 14-month highs keep pressure on silver prices, highlighting challenges for non-yielding assets.
Gold’s moves above $2663 could support silver, while a lack of momentum in precious metals may trigger further selling.

Can Silver Push Past Key Resistance Levels?

Silver prices are ticking higher today but remain below the crucial 200-day moving average at $29.96. This level serves as a key resistance zone, and breaking above it would likely draw in buyers. If silver clears this hurdle, the next target lies at $30.54, a critical level formed by the 50-day moving average and a short-term pivot point.

Daily Silver (XAG/USD)

A successful breakout above $30.54 could open the door to $32.33, a significant upside target. However, failure to overcome resistance risks a retreat. A drop below $29.70 could drive prices lower, testing support at $28.74. Investors should keep a close eye on these levels as silver navigates this crucial range.

At 12:48 GMT, XAG/USD is trading $29.73, up $0.11 or +0.36%.

How Will Inflation Data Impact Silver Prices?

Today’s U.S. Producer Price Index (PPI) report is expected to show a 0.4% rise for December, with core PPI increasing 0.2%. These figures are key to understanding inflation trends and how they might influence Federal Reserve policy.

If inflation comes in higher than expected, it could increase the chances of further interest rate hikes, which often weigh on silver by boosting Treasury yields and the dollar. On the other hand, softer inflation numbers may ease concerns about aggressive monetary tightening, creating a more favorable environment for silver as an inflation hedge.

What Role Does Gold Play in Silver’s Outlook?

Daily Gold (XAU/USD)

Gold, often seen as silver’s big brother, is trading near a critical level at $2663.51. A bullish move in gold could lift silver by improving overall sentiment in the precious metals market. However, both metals face headwinds from rising Treasury yields, which are near a 14-month high and reduce the appeal of non-yielding assets.

Even so, persistent inflation fears or a dovish pivot from the Federal Reserve could reignite demand for gold and silver, providing a boost to both markets.

What’s Next for Silver?

For silver to break higher, it must close above $29.96 and sustain momentum toward $30.54. If these levels are achieved, a rally toward $32.33 becomes possible. However, failure to move higher risks a pullback, with $29.70 and $28.74 acting as key support levels.

Investors should watch today’s inflation data and how it affects the dollar and gold, as these factors will heavily influence silver’s next move.

More Information in our Economic Calendar.

About the Author

James Hyerczykauthor

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.