Silver (XAG/USD) traded 1.1% higher at around $65.40 during the Asian session on Wednesday, reflecting strength ahead of the United States Consumer Price Index (CPI) data for July, which is scheduled for release at 12:30 GMT [1]. Market estimates suggest that the US headline CPI grew at an annual pace of 3.4%, down from 3.5% in June, while the core CPI is expected to decline to 2.5% year-on-year from the previous 2.6%. On a monthly basis, headline and core inflation are projected to rise by 0.1% and 0.2%, respectively [1].
Investors are closely monitoring the US inflation data for insights into the Federal Reserve's monetary policy outlook. In the latest policy announcement, Chairman Kevin Warsh highlighted upside inflation risks and reiterated the Fed's commitment to achieving the 2% inflation target [1].
Despite the bullish momentum in silver, surging oil prices driven by restricted global energy supply—particularly due to Middle East conflicts—could limit further upside. Data from Kpler shows that shipping traffic through the Strait of Hormuz, a key route for nearly 20% of global energy supply, dropped to six vessels on August 10, compared to a recent 10-day average of about 11 and a pre-war level of 130 to 140 ships daily, according to Reuters [1].
Additionally, the CME Group announced plans to introduce round-the-clock trading for its 100-ounce silver futures contract starting in September, following strong demand for its 1-ounce gold futures contract launched on July 24, as reported by Reuters [1].
Technical analysis indicates that XAG/USD is trading at $65.53, above the 20-day exponential moving average (EMA) at $61.28, reinforcing a bullish near-term bias. The Relative Strength Index (14) stands at 61.21, suggesting constructive upside momentum without being overbought. Immediate support is at the 20-day EMA, while resistance lies at the August 10 high of $66.59 and the June 17 high of $71.56 [1].
CONCLUSION
Silver prices are advancing ahead of key US inflation data, with technical indicators supporting a bullish outlook. However, upside may be capped by rising oil prices and ongoing geopolitical tensions affecting global energy supply. Investors are awaiting the CPI release for further direction on Federal Reserve policy.