Silver Holds Steady Despite Inflation Data, ECB Rate Hike

Silver prices held steady Thursday, gaining 0.28% despite strong inflation reports and a European Central Bank rate hike. Spot silver (XAGUSD) traded at $63.61, up $0.18, at 13:20 GMT. The metal had fallen earlier in the week as traders anticipated negative economic news.

The U.S. Consumer Price Index (CPI) on Wednesday showed annual inflation above 4%. The Producer Price Index (PPI) followed Thursday, rising 1.1% in May, higher than the 0.7% expected. Annual wholesale inflation reached 6.5%, the highest since November 2022.

Much of the PPI increase came from energy costs, with wholesale gasoline jumping 23.4%. Core PPI, which excludes food and energy, rose 0.4%, below the 0.5% expectation. This suggests inflation is contained primarily to energy. Separately, the European Central Bank raised its deposit rate by 25 basis points to 2.25%, its first hike since 2023.

Despite these bearish factors, silver stopped its earlier decline. This indicates that traders had already priced in the negative news before the data was released. Analysts note that resistance for silver sits at the 200-day moving average of $68.14, while key support levels are seen around $61.00 and $60.83.