Silver is holding steady around $38.00, helped by lower-than-expected US Producer Price Index (PPI) data for June. Currently trading at about $37.90 per ounce, Silver barely reacted to the unchanged PPI, which fell short of expectations, unlike the previous month’s increase. The data showed that the headline PPI stayed the same compared to last month, while the annual PPI decreased to 2.3%, both below forecasts. Core PPI also showed no growth this month, falling short of predictions, and dropped to 2.6% year-over-year. This came after US Consumer Price Index (CPI) data indicated slightly weaker core inflation. As a result, the urgency for rate cuts has lessened, easing pressure on the US Dollar and boosting Silver prices. Silver recently hit a 14-year high of $39.13 before pulling back, but it still shows a bullish trend. The metal is supported around the middle of a rising channel after breaking out from a previous consolidation range. The 21-day EMA at $36.82 serves as key support, with immediate resistance at $39.13. If Silver closes above this level, it could head towards $40.00, while $37.50 provides initial support. Momentum indicators like RSI and MACD suggest that Silver’s upward trend will continue, despite some recent profit-taking. We believe that the latest inflation reports create a positive outlook for Silver in the coming weeks. The lower price pressures increase the chances of Federal Reserve rate cuts later this year. This should keep the US Dollar down and support further gains in precious metals. Current market conditions reflect this optimism, with the CME FedWatch Tool showing over a 90% chance of a rate cut by the September meeting. Additionally, the latest Commitments of Traders report indicates that money managers hold considerable net-long positions, confirming strong interest in Silver’s ongoing rise. Given the bullish momentum, we see value in using call options to take advantage of potential upward moves while managing risk. This strategy allows traders to participate in a rally toward $40.00 without fully investing in futures contracts. For those looking to reduce costs, creating bull call spreads could also be a good approach. The recent multi-year high is noteworthy and reminds us of the strong rally in 2011, when prices nearly reached $50 per ounce. While past performance doesn’t guarantee future results, this historical reference provides a psychological guide for a potential extended bull run. Traders should closely monitor the immediate resistance level discussed in this analysis. If Silver breaks and closes above that level, it will signal an opportunity to increase bullish positions. However, a drop below the key moving average support would mean re-evaluating the trade defensively.

here to set up a live account on VT Markets now