Silver Rises as Dollar Weakness Offsets Inflation Pressure
Spot Silver (XAGUSD) closed at $75.93 on Friday, up $0.64 or 0.85%, trading between $74.82 and $76.84. The gain came despite a stronger than expected inflation report. The U.S. Dollar Index did the heavy lifting, dropping 0.22% on Friday and 1.6% for the week, its biggest weekly loss since January. A weaker dollar makes silver cheaper for foreign buyers and that’s what drove the bid.
CPI Came in Hot but the Dollar Told a Different Story
March CPI rose 0.9% month over month compared to 0.3% in February. Annual inflation jumped to 3.3% from 2.4%. The driver was energy. Gasoline prices jumped 21.2%, the largest monthly increase since 1967, and accounted for nearly 75% of the total monthly gain. Diesel and other fuels rose 30.8%, also a record. Core CPI came in at 0.2% on the month and 2.6% year over year, up slightly from 2.5%. The inflation number was hot but the market looked past it. The dollar sold off anyway and silver followed the dollar, not the inflation data.