Silver Price Forecast: XAG/USD maintains position around $31.00 as traders await US CPI


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  • Silver
    price
    holds
    gains
    as
    investors
    exercise
    caution
    ahead
    of
    US
    Consumer
    Price
    Index
    (CPI)
    data
    due
    on
    Thursday.

  • Fed
    Powell’s
    neutral
    remarks
    on
    Wednesday
    provided
    support
    for
    non-yielding
    Silver.

  • Renewed
    Israeli
    attacks
    could
    hinder
    efforts
    to
    negotiate
    a
    ceasefire
    agreement
    and
    bolster
    the
    demand
    for
    the
    safe-haven
    Silver.

Silver
price
(XAG/USD)
gains
ground
for
the
third
successive
session,
trading
around
$31.00
per
troy
ounce
during
the
Asian
hours
on
Thursday.
This
upside
could
be
attributed
to
investors’
caution
ahead
of
the
release
of
the
upcoming
US
Consumer
Price
Index
(CPI)
data
for
June,
scheduled
for
release
on
Thursday,
for
more
clarity
on
the
Federal
Reserve’s
(Fed)
monetary
policy
direction.
The
higher
interest
rates
negatively
impact
the
demand
for
non-yielding
assets
like
Silver.

Market
forecasts
generally
predict
that
the
annualized
US
core

CPI

for
the
year
ending
in
June
will
remain
steady
at
3.4%.
Meanwhile,
headline
CPI
inflation
is
expected
to
increase
to
0.1%
month-over-month
in
June,
compared
to
the
previous
flat
reading
of
0.0%.

Meanwhile,
on
Wednesday,
Federal
Reserve
(Fed)

Chairman
Jerome
Powell

underscored
the
importance
of
closely
monitoring
the
labor
market,
highlighting
its
significant
deterioration.
Additionally,
Powell
expressed
confidence
in
the
downward
trend
of
inflation,
following
his
remarks
on
Tuesday
that
emphasized
the
necessity
of
further
data
to
strengthen
confidence
in
the
inflation

outlook
.

Additionally,
Fed
Chair
Powell
emphasized
on
Tuesday
that
a
“policy
rate
cut
is
inappropriate
until
the
Fed
gains
greater
confidence
that
inflation
is
headed
sustainably
toward
2%.”
He
also
noted
that
“first-quarter
data
did
not
support
the
greater
confidence
in
the
inflation
path
that
the
Fed
needs
to
cut
rates.”

On
the
geopolitical
front,
Israeli
forces
carried
out
an
offensive
in
northern
and
central
Gaza
on
Tuesday,
which
included
an
airstrike
on
a
tent
encampment,
as
reported
by
Reuters.
Palestinian
officials
reported
that
at
least
29
people,
mostly
women
and
children,
were
killed
in
the
strike.
The
incident
occurred
as
spectators
gathered
at
a
school
grounds
in
Abassan,
east
of
Khan
Younis,
where
vendors
were
selling
smoothies
and
biscuits.

This
development
has
raised
concerns
about
a
possible
escalation
in
the
Middle
East
conflict
and
bolstered
the
appeal
of
safe-haven
assets
like

Silver
.
Hamas,
the
militant
group,
warned
that
renewed
Israeli
attacks
could
disrupt
efforts
to
negotiate
a
ceasefire
in
the
Gaza
conflict,
with
discussions
slated
to
resume
in
Doha
on
Wednesday.

Silver
FAQs

Silver
is
a
precious
metal
highly
traded
among
investors.
It
has
been
historically
used
as
a
store
of
value
and
a
medium
of
exchange.
Although
less
popular
than
Gold,
traders
may
turn
to
Silver
to
diversify
their
investment
portfolio,
for
its
intrinsic
value
or
as
a
potential
hedge
during
high-inflation
periods.
Investors
can
buy
physical
Silver,
in
coins
or
in
bars,
or
trade
it
through
vehicles
such
as
Exchange
Traded
Funds,
which
track
its
price
on
international
markets.

Silver
prices
can
move
due
to
a
wide
range
of
factors.
Geopolitical
instability
or
fears
of
a
deep
recession
can
make
Silver
price
escalate
due
to
its
safe-haven
status,
although
to
a
lesser
extent
than
Gold’s.
As
a
yieldless
asset,
Silver
tends
to
rise
with
lower
interest
rates.
Its
moves
also
depend
on
how
the
US
Dollar
(USD)
behaves
as
the
asset
is
priced
in
dollars
(XAG/USD).
A
strong
Dollar
tends
to
keep
the
price
of
Silver
at
bay,
whereas
a
weaker
Dollar
is
likely
to
propel
prices
up.
Other
factors
such
as
investment
demand,
mining
supply

Silver
is
much
more
abundant
than
Gold

and
recycling
rates
can
also
affect
prices.

Silver
is
widely
used
in
industry,
particularly
in
sectors
such
as
electronics
or
solar
energy,
as
it
has
one
of
the
highest
electric
conductivity
of
all
metals

more
than
Copper
and
Gold.
A
surge
in
demand
can
increase
prices,
while
a
decline
tends
to
lower
them.
Dynamics
in
the
US,
Chinese
and
Indian
economies
can
also
contribute
to
price
swings:
for
the
US
and
particularly
China,
their
big
industrial
sectors
use
Silver
in
various
processes;
in
India,
consumers’
demand
for
the
precious
metal
for
jewellery
also
plays
a
key
role
in
setting
prices.

Silver
prices
tend
to
follow
Gold’s
moves.
When
Gold
prices
rise,
Silver
typically
follows
suit,
as
their
status
as
safe-haven
assets
is
similar.
The
Gold/Silver
ratio,
which
shows
the
number
of
ounces
of
Silver
needed
to
equal
the
value
of
one
ounce
of
Gold,
may
help
to
determine
the
relative
valuation
between
both
metals.
Some
investors
may
consider
a
high
ratio
as
an
indicator
that
Silver
is
undervalued,
or
Gold
is
overvalued.
On
the
contrary,
a
low
ratio
might
suggest
that
Gold
is
undervalued
relative
to
Silver.