Silver prices rallied to a 2.5 weeks high, and are currently trading near $26.46, following weakness in the US dollar and support from Fed Chair, Jerome Powell, who sounded dovish, during the Fed statement. He said on Wednesday that the pace of the recovery has moderated, and that it is likely to take "some time", before substantial progress is seen toward the Fed's goals of maximum employment and price stability.
Stronger inflation data is likely to support demand for precious metals, which are used as a hedge against inflation. The German Jan CPI (EU harmonized) rose +1.6% y/y, stronger than expectations of +0.5% y/y, and the biggest increase in 11 months. Also, the U.S. Q4 core PCE deflator rose +1.4% q/q, stronger than expectations of +1.2% q/q.
Comments on Thursday from ECB Governing Council Member, Rehn, were bullish for bullion prices. He has said that the ECB is "closely monitoring developments in the exchange rate, especially regarding the inflation outlook", and is ready to use all the tools necessary to stimulate inflation.
However,silver prices are likely to remain under pressure, on the back of the worsening COVID pandemic situation. The overall number of global coronavirus cases has topped 100.7 million, while the deaths have surged to more than 2.18 million, according to the Johns Hopkins University.
Silver prices are likely to face stiff resistance near $27.04-$28.17 levels. Meanwhile, key support levels are seen around $24.84-$22.64 levels.