Silver Price News: Silver Ticks Higher As US Inflation Slows

Silver prices nudged higher on Friday, taking modest support from data showing that US inflation slowed in May.

Prices were trading at $29.14 an ounce by Friday afternoon, having briefly dropped as low as $28.86 an ounce in early trading. That compared with around $29.00 an ounce in late trades on Thursday, leaving silver prices moderately higher day-on-day.

Gold prices followed a similar trading pattern on Friday, albeit closing flat day-on-day, providing little direction for silver.

Data released on Friday afternoon showed that the US core PCE price index – the US Fed’s preferred measure of inflation – increased by a marginal 0.1% in May compared with April. While the figure was in line with market expectations, it did highlight that inflation is slowing down, as it was the smallest monthly increase since November 2023.

Inflation has been ‘stickier’ than expected so far in 2024, causing central banks to hold off from cutting interest rates and prompting the markets to scale back their bets on an easing of monetary policy until the autumn. US Fed officials have frequently underlined the need to see inflation coming down sustainably toward target levels before they can proceed with a more dovish stance on rates.

In that context, the latest inflation figures were likely taken by the market as a sign that monetary easing is moving closer to materialising – which is a supportive element for precious metals prices.

Looking ahead, the markets will be watching out for the June US ISM Manufacturing PMI figures on Monday. After a surprise drop in May, any further declines in US industrial activity could add pressure on the US Fed to slash interest rates. Tuesday’s Euro Area inflation rate flash for June will also be of interest, as well as a planned speech by US Fed chair Jerome Powell and the latest monthly US jobs numbers.