Rising U.S. Treasury yields are also challenging silver's appeal. Despite the Fed's recent interest rate cuts, skepticism about extending dovish policy remains, especially given inflation expectations if fiscal policy stimulates economic activity. As yields rise, the opportunity cost of owning silver and other non-yielding assets increases, potentially discouraging investment unless there is a significant change in interest rate sentiment.
What economic data could impact silver this week?
Traders will be keeping an eye on several important US economic announcements this week, with October Consumer Price Index (CPI) on Wednesday, Producer Price Index (PPI) on Thursday, and Retail Sales on Friday. are. These reports provide insight into inflation and the health of the economy and can influence the Fed's policy direction. Additionally, statements from Fed Chairman Jerome Powell and other officials this week could provide further insight, potentially increasing silver volatility as traders gauge the outlook for interest rates.
Will physical demand support silver prices?
Despite the cautious outlook, silver could be supported by physical demand if prices approach critical levels. Analysts say the $28.50 to $27.75 range could attract buying interest from industrial users and jewelers, leading to price stability.
Similar demand could be expected as gold approaches the $2,500 level, but if prices fall to that level, silver's industrial uses could prompt more bidding. In the short term, however, a strong dollar and rising US Treasury yields remain at the heart of the silver bearish trend, limiting recovery unless the dollar weakens or demand from industrial buyers increases sharply. There is a high possibility that it will be done.
