Silver Price Forecast: XAG/USD jumps to almost $53 even as US bond yields climb

• Silver price rallies towards $53 despite US bond market sell-off.
• October’s above-forecast US CPI figures have pushed US Treasury yields higher.
• US inflation is expected to stay elevated next year as well, according to Commerzbank.

October’s United States (US) Consumer Price Index (CPI) figures exceeded forecasts, driving US Treasury yields sharply higher and intensifying debate over whether the Federal Reserve (Fed) could deliver an outsized interest rate increase at its December policy meeting. Despite this backdrop, Silver (XAG/USD) has gained almost 3% to trade near $53.00 in Wednesday’s European session.

Treasuries remain under pressure after US inflation exceeds forecasts

The latest sell-off in bonds was chiefly triggered by the inflation release, according to Deutsche Bank strategists, who observe that “that US CPI print drove the biggest moves of the day, with the monthly core CPI print for October above consensus at +0.30% (vs. +0.2% expected).”

Highlighting the persistence of price pressures, Deutsche Bank adds that “moreover, it was the third consecutive month with core CPI at +0.3%, and if you take those three months together, the annualised pace for core CPI is running at +3.75%.” The bank concludes that “that’s the fastest pace on that measure since April 2024, so it made it increasingly difficult to dismiss this as a blip.”

Headline inflation was stronger still, the bank notes: “meanwhile, the headline CPI numbers were faster still, with monthly headline CPI at +0.35% (vs. +0.3% expected), with the 3-month annualised pace at +5.72%.” Assessing the market response, its strategists say that “for markets, the clearest impact could be seen in US Treasuries, with yields surging across the curve.”

At the time of writing, the yield on 10-year US Treasuries stands at around 5%, up 2.4%. Higher returns on interest-bearing US assets reduce the relative attraction of non-yielding holdings such as Silver.

US inflation is expected to remain elevated

Price pressures in the US remain uncomfortably strong, Commerzbank economists warn, noting that “prices are still rising too quickly, even though the increase was somewhat smaller than in September.” Their assessment is that underlying inflation has stopped improving rather than continued to ease: “core inflation, a key gauge of the underlying trend, thus remains (too) high and is no longer trending downward,” they say. Looking ahead, they argue that “the strong economy and the ongoing conflict in the Middle East suggest that inflation is unlikely to ease in the near term,” adding that “inflation is not expected to decline until 2027, and even then, it is likely to remain above a level consistent with price stability.”

Silver prices are likely to remain under pressure if that scenario materialises.

Silver Remains Below Key Technical Resistance

Trading at $52.94 on the daily chart, XAG/USD remains beneath its 20-day Exponential Moving Average (EMA) of $53.89. Recent efforts to stabilise have yet to overcome this dynamic resistance, leaving the near-term outlook bearish. Although the Relative Strength Index (RSI) has rebounded from oversold territory to 43.6, it is still below the 50 threshold. This points to a modest reduction in downward momentum, rather than confirmation of a change in trend.

A sustained move through the 20-day EMA at $53.89, the first resistance on the upside, would be required to temper the prevailing bearish bias and pave the way for a more substantial recovery. The supplied indicators identify no clear structural support nearby. Consequently, trading below the EMA leaves XAG/USD vulnerable to additional losses should sellers renew pressure beneath recent lows.

(The technical analysis of this story was written with the help of an AI tool. Know more.)