-
Silver price remains range-bound around $36.50 as traders await May’s US inflation data.
-
Rising inflationary signals could prompt the Fed to delay potential interest rate cuts.
-
US official Lutnick indicates that both Washington and Beijing are prepared to ease export restrictions.
Silver (XAG/USD) is trading in a narrow range around $36.50 during Wednesday's European session, as traders adopt a cautious stance ahead of the release of the United States Consumer Price Index (CPI) for May, scheduled for 12:30 GMT.
Expectations point to an annual increase in headline inflation to 2.5%, up from 2.3% in April, while core CPI — which excludes food and energy — is projected to rise to 2.9% from the previous 2.8%. On a monthly basis, headline CPI is forecast to climb 0.2% and core CPI 0.3%. A hotter-than-expected report could reinforce the Federal Reserve's current hawkish stance, potentially delaying any rate cut discussions.
Persistent inflationary pressures would give Fed officials further reason to keep interest rates elevated, especially as they evaluate the broader impact of President Trump’s economic policies. A prolonged period of high interest rates typically weighs on non-yielding assets like Silver, potentially capping further upside in the short term.
In the lead-up to the CPI release, the US Dollar Index (DXY) has edged higher, reaching near 99.20, as traders price in a stronger Greenback. Meanwhile, easing geopolitical tensions between the US and China are also influencing sentiment. Following two high-level meetings in London, US Commerce Secretary Howard Lutnick signaled progress, suggesting that the US could scale back export controls on advanced chips if China lifts restrictions on rare earth exports.
Historically, easing global tensions tend to reduce the appeal of safe-haven assets like Silver, adding to the consolidation in current price levels.
Silver Technical Outlook: Bullish Trend Intact Despite Pause Below $36.90
Silver’s rally has taken a breather after reaching a fresh multi-year high near $36.90. Despite the current consolidation, the broader technical outlook remains bullish. The 20-day Exponential Moving Average (EMA), currently around $34.50, continues to trend upward, indicating ongoing upward momentum.
Meanwhile, the 14-day Relative Strength Index (RSI) holds firm above 70.00, suggesting strong bullish sentiment but also hinting at potential overbought conditions in the short term.
On the upside, the key psychological resistance lies at $40.00 — a level that could attract fresh buying interest if breached. On the downside, initial support is seen at $34.87, the October 22 high, which could serve as a cushion against any corrective pullbacks.
Overall, Silver remains well-supported in the near term, though investors will closely watch US inflation data for fresh directional cues.
Silver daily chart
