NEW YORK - Silver prices soared this week, with an 8.43% increase to $23.87, buoyed by investor speculation that the U.S. Federal Reserve may pause its interest rate hikes. This sentiment is rooted in recent economic data suggesting an inflation slowdown, with October's consumer price index remaining static and producer prices showing less aggression than anticipated. Additionally, a rise in unemployment claims is seen as aligning with the Fed's anti-inflation goals.
The market's bullish outlook is further supported by technical analysis, indicating that silver is trading above important averages and approaching key resistance levels. Investors are closely watching the metal's performance as it hovers above the $23.55 support level and nears resistance at $23.94, with an eye on the minor resistance level of $24.50.
The anticipation of a less hawkish stance from the Fed in its upcoming December meeting has enhanced silver's appeal as an investment. This is in contrast to earlier statements from Fed Chairman Jerome Powell, who had indicated the possibility of further rate increases.
Contributing to the positive trend, China's central bank has notably increased its silver reserves, underscoring strong market confidence. As investors navigate a weakening dollar and persistently low Treasury yields, silver maintains its position above the critical support level of $21.92.
This week's rise in silver prices reflects a broader market anticipation of a potential shift in monetary policy, as investors look ahead to the Federal Reserve's next move amidst evolving economic indicators.
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