Silver price (XAG/USD) gains ground after three days of losses, trading around $56.00 per troy ounce during Asian hours on Thursday. Non-yielding Silver gained ground as crude oil prices declined and pressure across other markets eased. A softer US dollar and retreating bond yields provided additional support to precious metals, creating a more favorable environment for non-yielding assets.
However, a hotter-than-anticipated US inflation report soon tempered these gains. The data reinforced expectations for a potentially more hawkish Federal Reserve (Fed), bolstering arguments for an interest rate hike at the upcoming Federal Open Market Committee (FOMC) meeting on October 27–28. Following the release, futures traders raised the probability of a rate hike at the late-October meeting to approximately 31.6%, according to the CME Group’s FedWatch tool.
The economic pressure was detailed in a report released on Wednesday by the Bureau of Labor Statistics (BLS). The US Consumer Price Index (CPI), a broad measure of goods and services costs across the economy, climbed 0.6% month-over-month in September, pushing the 12-month headline rate to 3.7%. Both metrics came in higher than economists' forecasts of 0.6% and 3.6%, respectively. Meanwhile, core CPI, which strips out volatile food and energy components, advanced 0.3% for the month and rose 2.6% on an annual basis, exceeding market estimates of 0.2% and 2.5%.
Fed’s Daly delivers a moderately more hawkish tone, with the FXS Speechtracker score at 6.8 versus a 6.1 historical average, signaling firmer conviction on the need for possible further tightening. The emphasis that gas-driven headline CPI is rising while core inflation remains stubborn, alongside remarks that more rate hikes are likely but timing should be deliberate, underscores a cautious hawkish stance that prioritizes clear communication and market stability over rapid action. The focus on persistent above-target inflation risks, a steady labor market, and the reassurance that markets have calmed after the CPI shock reinforces a message of patience within a still price-stability-focused framework.
The FXS Fed Sentiment Index slipped by 0.84 points to 128.17, indicating a modest pullback in perceived hawkishness even as the index remains firmly above the neutral 100 mark. This configuration suggests that, despite a slight softening in incremental tone, the overall policy backdrop remains hawkish, with the FXS Fed Sentiment Index and FXS Speechtracker both pointing to a Federal Reserve still biased toward further tightening if inflation shocks persist.
In the daily chart, XAG/USD trades at $56.00, extending a bearish phase as it holds well below the nine‑ and 50-day Exponential Moving Averages (EMAs), which cap the upside and frame a deteriorating trend structure. The 14-day Relative Strength Index (RSI) at 32.36 hovers just above oversold territory, hinting at persistent selling pressure, while the FXS Fed Sentiment Index at 128.17 suggests still‑elevated policy uncertainty that may continue to weigh on silver in the near term.
On the topside, initial resistance is aligned with the short‑term EMA at $58.80, and a sustained break above this level would be needed to relieve immediate downside pressure. Beyond that, the 50‑day EMA at $62.61 represents a more significant barrier; as long as price trades beneath this cluster of moving averages, rallies are likely to be sold into, keeping the bearish bias intact in the coming sessions.