Key Moments
- XAG/USD trades 1.1% higher near $65.40 in Wednesday’s Asian session as markets await the July US CPI release.
- Consensus projections point to softer annual headline and core inflation, at 3.4% and 2.5% respectively.
- Silver holds above its 20-day EMA at $61.28, with upside levels eyed at $66.59 and $71.56.
Spot Silver Advances as Markets Focus on US Inflation
Silver (XAG/USD) is trading about 1.1% higher around $65.40 during the Asian session on Wednesday, with the metal strengthening ahead of the United States (US) Consumer Price Index (CPI) data for July, scheduled for release at 12:30 GMT.
Market expectations suggest that the annual US headline CPI increased by 3.4%, easing from 3.5% in June. Over the same period, the core CPI – which strips out food and energy – is anticipated to slow to 2.5% Year-on-Year (YoY) from the prior 2.6% reading.
On a monthly basis, estimates indicate that both headline and core inflation rose, by 0.1% and 0.2% respectively.
Traders are closely watching the inflation figures for guidance on the Federal Reserve’s (Fed) policy path. In the most recent policy statement, Chairman Kevin Warsh highlighted ongoing upside inflation risks and emphasized that the board remains focused on returning inflation to its 2% target.
Energy Market Strains Temper Silver’s Upside
At the same time, elevated oil prices linked to constrained global energy supplies due to conflict in the Middle East are seen as a potential cap on further gains in Silver.
Data from Kpler show that on August 10, shipping movements through the Strait of Hormuz – a critical route for nearly 20% of global energy supplies – stood at only six vessels, compared with a recent 10-day average of about 11. Reuters reports that this marks a steep drop from pre-war traffic levels of 130 to 140 ships per day.
CME Expands Silver Futures Trading Hours
On Tuesday, CME Group disclosed that it will introduce round-the-clock trading for its 100-ounce silver futures contract starting in September. The move follows what the exchange described as strong participation in its 1-ounce Gold futures contract, which began trading on July 24, according to Reuters.
Technical Overview: XAG/USD Maintains Bullish Tone
On the daily chart, XAG/USD is quoted at $65.53, extending its move above the 20-day exponential moving average (EMA) at $61.28 and supporting a constructive short-term bullish bias.
Price action has been steadily moving away from the earlier consolidation area, while the 14-day Relative Strength Index (RSI) stands at 61.21, remaining in positive territory and below overbought levels. This configuration suggests that upside momentum is still favorable without showing signs of excessive froth.
| Technical Level | Price | Comment |
|---|---|---|
| Current price (daily chart) | $65.53 | Extends advance above 20-day EMA |
| 20-day EMA (support) | $61.28 | First key support on any pullback |
| Immediate resistance | $66.59 | August 10 high |
| Next upside target | $71.56 | June 17 high |
| RSI (14) | 61.21 | Positive, below overbought |
On the downside, the area around the 20-day EMA at $61.28 offers initial support and underpins the broader recovery. To the upside, a break above the August 10 peak at $66.59 would open the way for a potential test of the June 17 high at $71.56.
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