XAG/USD falls 8% to $76.65 as stronger US inflation data fuels expectations of a December Fed rate increase.
Silver prices dropped sharply Friday, with XAG/USD sliding nearly 8% to $76.65, its lowest level in over a week. The decline erased earlier weekly gains as hawkish Federal Reserve expectations lifted US Treasury yields and the US Dollar, reducing demand for non-yielding assets like silver.
The selloff followed stronger-than-expected US inflation data and resilient consumer spending, which reinforced bets for a potential Fed rate hike in December. Traders now see a 42% chance of a December increase, according to the CME FedWatch Tool, while pricing in steady rates in the near term.
Technical indicators show silver trading below its 50-day and 100-day SMAs at $76.99 and $81.28, respectively, with the 200-day SMA at $65.04 offering distant support. The Relative Strength Index near 47 suggests bearish momentum remains intact.