Silver prices are targeting a break above $33.40, driven by recent US inflation data. The Producer Price Index (PPI) reported a decline to 3.2% and core PPI to 3.4% in February, while the Consumer Price Index (CPI) rose by 2.8% and core CPI by 3.1%, both slower than expected.
Federal Reserve Chair Jerome Powell mentions a potential cut in interest rates if inflation continues to weaken. Trump’s tariff discussions have further increased safe-haven demand for silver, as concerns over a trade war with the EU grow.
Market Sentiment And Dollar Index
The US Dollar Index has risen to approximately 103.80, amid cautious market sentiment. Silver is supported near $32.30, with the psychological support level at $30.00 and a resistance level at $34.87.
The decline in both the Producer Price Index and its core measure indicates that inflationary pressures in production costs are easing. At the same time, consumer inflation data came in lower than many had anticipated. This suggests that price pressures at the consumer level might also be stabilising. For those trading derivatives, this presents a clearer picture of where monetary policy could be headed.
Powell’s comments signal that if inflation continues to slow, the Federal Reserve could cut rates. A reduction in interest rates would likely put downward pressure on the US dollar, making non-yielding assets such as silver more attractive. If rate-cut expectations gain momentum, markets may witness further capital inflows into silver.
Meanwhile, concerns over tariffs have added another reason why investors are seeking safer assets. Trade tensions, particularly between the United States and the European Union, heighten worries over economic disruptions that could impact industrial demand and financial markets. We have seen similar movements in past trade disputes—silver has historically acted as a refuge when uncertainty rises.
Silver’s Technical Levels
The US Dollar Index hovering around 103.80 suggests that traders remain cautious. A stronger dollar tends to weigh on silver, while a weaker one usually provides tailwinds. Right now, the dollar is holding its ground, but if expectations of rate cuts build, we could see silver benefit as the dollar retreats.
Technically, silver is finding support near $32.30. This level has proven to be a reliable floor recently, though a break below could bring the psychological $30.00 level into focus. On the upside, the key resistance sits at $34.87. If prices breach $33.40, momentum could take silver towards this resistance.
In the coming weeks, watching inflation data will be key for traders using leverage. A softer trend in prices would fuel expectations of monetary easing, reinforcing silver’s appeal. Those trading in the short term should also monitor any developments in trade policies, as tariff talks could drive volatility.
