Silver prices declined over the last 24 hours as expectations of a Fed rate hike in 2016 increased, following U.S. headline inflation reaching an annual rate of 1.1% from 0.9%, and Industrial Production increasing by 0.7% MoM from -0.6% prior. Expectations of rate hikes were further bolstered as one Fed member suggested a rate hike may occur in June or July, whilst two others said that they would expect up to three rate increases this year. Today, further hints of rate hikes or not, may be revealed, as the Federal Reserve will publish minutes from its most recent FOMC Meeting. According to overnight-index swaps, the market is now pricing in 32 bps worth of rate hikes over the next 12 months and this gives it a 17.7% likelihood of a rate hike on June 15, the corresponding figure using the Fed Funds Futures being 12%.

Technically, silver prices remain trapped in the $16.78 – $17.56 range, which are the April 25 low and May 11 high respectively. As long as price remains trapped in the above-mentioned range there will be no clear price trend and a break to this level may be needed for a trend to form.

Support levels below the lower end of the range are the psychological level of $16.50, followed by the March 18 high of $16.30. Resistance levels above the May 11 high of $17.56 are the May 5 high of $17.70, followed by the May monthly high of $17.99.

Silver Price | CFD: XAG/USD

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