On Thursday (August 15th) during the European trading session, silver showed elasticity, trading above the key short-term pivot point of $27.85. This level is crucial as investors expect the gold price to enter the 50 day moving average of $29.21, which is a key target level if the upward trend continues. On the previous trading day, due to weakened expectations of a significant interest rate cut by the Federal Reserve in September due to US consumer inflation data, the US dollar fell by 1.04%.

Spot silver was reported at $28.200 per ounce, up 2.39%.

CPI data and market response

The US Consumer Price Index (CPI) released on Wednesday showed a moderate increase in July, with the annual inflation rate dropping below 3% for the first time since early 2021. Although these data support the reasons for interest rate cuts, they also indicate that it is unlikely to significantly reduce interest rates, which has eased market expectations. The initial reaction led to a sell-off of silver as traders re evaluated the possibility of aggressive monetary easing policies. However, some market participants believe that the market reaction was too negative, leading to a slight rebound in silver prices during the Asian trading session.

Focus on US retail sales and China's economic prospects

Market participants are now turning their attention to the upcoming US retail sales data to be released on Thursday. Economists predict that after strong growth last month, July will increase by 0.3%. These data are crucial for forming expectations for the future actions of the Federal Reserve. The strong retail sales report may further weaken hopes of a significant interest rate cut, which could limit silver's upside potential.

At the same time, China's industrial output grew by 5.1% and retail sales increased by 2.7% in July. Analysts say that consumer spending is showing signs of improvement.

Short term market forecast

Given the mixed economic signals from the United States and China, silver prices may continue to fluctuate in the short term. Although there is a possibility of moving towards $29.21 in terms of technology, the strength of the upcoming US economic data will be crucial. The market's response to retail sales data may determine whether silver can maintain its current momentum or face new pressures. In the long run, geopolitical risks and central bank demand for precious metals continue to support a cautious bullish outlook on silver.

technical analysis

Daily chart of spot silver

Silver is currently on the strong side of the pivot, at $27.85. If buyers can use this as a basis throughout the entire trading session, it is possible to soar to the 50 day moving average of $29.21 in the near future, followed by another pivot point of $29.50. These two resistance levels hinder the currency pair from accelerating into the main tops of $31.76 and $32.52.

Breaking through the weak side of the pivot point may lead to new selling pressure and ultimately test the 200 day moving average of $26.20.