Silver Holds Near $78, Strong Dollar & PCE Data Determine Direction
Silver prices moved steadily to slightly lower on Friday (February 20th) as the market awaited US inflation data, while a strengthening dollar limited the precious metal's upside. Spot silver hovered around $77.74 per troy ounce, although on a monthly basis it still experienced a sharp correction after a period of high volatility in early February.
The strengthening dollar was the main restraining factor. The greenback is expected to post its strongest weekly performance since October, supported by solid US economic data, the Fed's hawkish stance, and rising geopolitical tensions—making investors more defensive and boosting demand for dollar-denominated assets.
Market focus now turns to the release of Core PCE (the Fed's favorite inflation indicator) and the revised US fourth-quarter GDP, which could alter expectations of the interest rate path and trigger sharp movements in the dollar and yields. Market consensus is awaiting signals on whether price pressures are strengthening again or starting to soften—two scenarios that are usually immediately reflected in silver's movements.
On the sentiment side, silver continues to ride on the safe haven factor, but these flows are more volatile than gold due to its dual nature: a hedge asset and an industrial commodity. This week, for example, news of the start of US-Iran talks temporarily pressured gold and silver as markets perceived geopolitical risks to be easing.
From an industrial fundamentals perspective, the sharp price rally has also begun to raise the risk of demand destruction. Reuters reported that solar panel manufacturers are increasingly aggressively reducing their reliance on silver and turning to alternative materials like copper to reduce costs, after silver prices rose sharply over the past year. This development is important because the photovoltaic sector is one of the largest industrial users of silver.
Technically, silver remains in a consolidation phase with a wide intraday range. Market data shows a daily range of around $77.00-$78.77, making the $78.80-$80.00 area the closest psychological resistance zone, while $77.00 serves as initial support that must be maintained to maintain a recovery bias.
Source: Newsmker.id
