Silver Prices Consolidate Around $29 as Investors Await US PCE Inflation Data
Silver (XAG/USD) prices traded in a tight range around $29.00 in the European trading session on Friday.
The white metal consolidated as investors await the US (US) core Personal Consumption Expenditures (PCE) Price Index data for November, due at 13:30 GMT.
Economists expect the US annual core PCE inflation data to rise to 2.9% from 2.8% in October. On a monthly basis, the underlying inflation data is expected to grow steadily at 0.2%.
Signs of a mild slowdown in price pressures are unlikely to affect market expectations that the Federal Reserve (Fed) will halt its policy easing at its January 2025 policy meeting. However, a sharp slowdown could weigh on those expectations. Conversely, a mild or sharp acceleration in price pressures would strengthen those expectations.
At its policy meeting on Wednesday, the Fed lowered its main lending rate by 25 basis points (bps) to 4.25%-4.50% but signaled fewer rate cuts for 2025. The Fed’s dotted chart shows that officials collectively see the federal funds rate heading to 3.9% in 2025 compared with 3.4% projected in September.
Ahead of the US PCE inflation data, the US Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, moved lower after posting a fresh two-year high of 108.50.
The 10-year US Treasury yield fell to 4.56% from a fresh six-month high of 4.60%. Higher yields on interest-bearing assets increase the opportunity cost of holding non-yielding assets, such as silver.
Source: FXStreet
