Silver (XAG/USD) is holding steady near $31.00 after finding support in the wake of the latest US Consumer Price Index (CPI) report. The data showed annual headline inflation rising to 2.6% in October, while core inflation remains stable at 3.3%, both meeting expectations. This persistent inflation, combined with the Federal Reserve’s cautious stance on interest rate cuts, is keeping the US Dollar firm near 106.00 and pressuring Silver prices.

Key Factors Affecting Silver:

US Dollar and Treasury Yields:

• Despite a slight dip following the inflation report, the US Dollar remains strong, and 10-year US Treasury yields are around 4.38%.
• Rising yields reduce the appeal of non-yielding assets like Silver, as they increase the opportunity cost of holding them.

Market Expectations for Trump Administration Policies:

• The market’s anticipation of Trump’s economic policies, such as increased tariffs and lower corporate taxes, has boosted demand for the Dollar and US bonds. If these policies stimulate economic growth, they could maintain upward pressure on yields, creating a challenging environment for Silver.

Technical Outlook:

Trendline and Support Levels:

• Silver remains on track to test the long-term upward trendline around $29.00, drawn from the February 28 low of $22.30. This level is a crucial support.
• Silver weakened after breaking below the $32.50 support from May 21. The next major support lies around $29.00, aligning with the trendline.

Moving Averages and RSI:

• The 20-day Exponential Moving Average (EMA), currently near $32.00, has turned downward, suggesting bearish momentum.
• The 14-day Relative Strength Index (RSI) is around 40.00. Sustaining below this level could trigger additional bearish momentum.

Outlook:

The near-term trend for Silver remains bearish, with support at $29.00. Any break below this level could accelerate selling, while a move above $32.00 would be needed to signal a potential reversal. In the meantime, Silver is likely to face pressure as US yields stay elevated and inflation remains above the Fed’s target, reducing the metal’s appeal.