Silver prices are trading in the range of $25.76-$26.63 Strength in the dollar index is keeping the silver price under pressure, however positive economic are likely to be supportive industrial metals and silver prices.
A larger-than-expected increase in US June consumer prices pushed US bond yields higher and supported gains in the dollar. Also, weakness in US equities on Tuesday helped some liquidity demand for the dollar.
Inflation expecting are keeping precious metals supported. As per the latest economic data, UK inflation jumped further above the Bank of England's target in June when it hit 2.5%, its highest since August 2018 and up from 2.1% in May.
The US June CPI rose +0.9% m/m and +5.4% y/y, stronger than expectations of +0.5% m/m and +4.9% y/y. The +5.4% y/y gain was the largest in nearly 13 years. Also, the June core CPI rose +0.9% m/m and +4.5% y/y, stronger than expectations of +0.4% m/m and +4.0% y/y. The +4.5% y/y gain was the largest in nearly 30 years.
However, hawkish Fed comments are likely to keep precious metals under pressure. St. Louis Fed President Bullard said there is "no good reason" for the Fed to keep aiding the housing market, and the time is right to pull back on Fed stimulus. Also, San Francisco Fed President Daly said she is "bullish" about the US economy going into the fall and "it's appropriate to start talking about tapering our asset purchases."
Positive economic data from China is supportive of industrial metals demand and silver. China Jun exports rose +32.2% y/y, stronger than expectations of +23.0% y/y. Also, China Jun imports rose +36.7% y/y, stronger than expectations of +29.5% y/y.
According to the CFTC Commitments of Traders report for the week ended July 6. Net long for silver futures increased by 3011 contracts to 44488 for the week. Speculative long position increased by 4935 contracts, while shorts added by 1924 contracts.
Silver prices are likely to trade firm while above the key support level of $25.50-$24.642 meanwhile immediate resistance level is seen around $26.63-$27.20