Silver Price Forecast: XAG/USD retreats to near $31.50 after China’s economic conference outcome

• Silver price falls back to near $31.50 after posting a fresh two-week high around $32.20.
• Chinese officials proposed to increase the issuance of bonds to boost infrastructure investment.
• The US producer inflation grew at a faster-than-expected pace in November.

Silver price (XAG/USD) gives up its entire gains and declines to near $31.50 in the North American session on Thursday. The white metal declines after posting a fresh two-week high around $32.20. The asset faces pressure after the conclusion of China’s two-day economic work conference. a high-level meeting that sets economic priorities for next year.

Top leaders of China didn’t provide specific details on the likely size of the stimulus package and the pace of monetary policy easing. However, officials said that they will increase the issuance of ultra-long special treasury bonds and local government special notes next year, which are important sources for infrastructure investment and other public spending, Bloomberg reported.

Investors await more details on the stimulus package to forecast the demand for Silver, given its application in various industries such as solar panels and mining, etc.

Meanwhile, hotter-than-expected United States (US) Producer Price Index (PPI) data for November has also weighed on the Silver price. As measured by the PPI, annual headline and core producer inflation accelerated to 3% and 3.4%, respectively. The impact of the hit US PPI data appears to be negligible on Federal Reserve (Fed) interest rate projections for the policy meeting on December 18 but could boost expectations that the central bank will pause the policy-easing spell in January.

After the US PPI data release, the US Dollar Index (DXY) recovered intraday losses and rises to near 106.80 and weighed on the Silver price.

Silver technical analysis

Silver price retreats after failing to revisit the horizontal resistance plotted from the May 21 high of $32.50. The near-term appeal of the Silver price remains firm until it stays above the 20-day Exponential Moving Average (EMA), which trades around $31.25.

The 14-day Relative Strength Index (RSI) approaches 60.00. A bullish momentum would trigger a decisive break above the same.

Looking down, the upward-sloping trendline is around $29.50, which is plotted from the February 29 low of $22.30 on a daily timeframe

Silver daily chart