- Silver prices are looking to extend their gains above $23, but are facing some pressure.
- The market mood is gloomy as investors await December core PCE price index data.
- Strong GDP numbers and stubborn inflation numbers could allow the Fed to maintain its hawkish interest rate stance.
Silver price (XAG/USD) is struggling to extend its upside above the key resistance level at $23.00. The white metal turned sideways as investors turned their focus to December US core personal consumption expenditure (PCE) price index data due at 1:30pm Japan time.
S&P 500 futures posted heavy losses in European trading, indicating a sharp decline in risk appetite among market participants. The US Dollar Index (DXY) is aiming to regain its nearly six-week high of 103.82 as demand for safe-haven assets improves.
US fourth quarter gross domestic product (GDP) data released on Thursday showed the economy grew at a solid 3.3% pace. This escalated upside risk into price pressure.
Meanwhile, investors are awaiting data on the US core PCE price index. Investors had expected underlying inflation to rise at a slower pace for the year to 3.0%, compared to November's forecast of 3.2%. Monthly core PCE data is expected to rise 0.2% after rising 0.1%.
The combination of stubborn inflation numbers and a positive economic outlook should allow Federal Reserve policymakers to maintain a hawkish interest rate stance through at least the first half of 2024.
silver technical analysis
Silver price attempts to break out of the descending triangle chart pattern that formed on the 4-hour scale. The downward trendline of the aforementioned chart pattern is plotted from the December 3, 2023 high of $25.92, and horizontal support is placed from the November 13, 2023 low of $21.88. The asset has stabilized above its 20-period exponential moving average (EMA) trading near $22.73.
The 14-period Relative Strength Index (RSI) aims to remain stable in the 60.00-80.00 range. If RSI (14) can do that, bullish momentum will emerge.
