Silver Price Outlook: XAG/USD Holds Near $36.50 Ahead of Key US Inflation Data

Silver Price Outlook: XAG/USD Holds Near $36.50 Ahead of Key US Inflation Data

XAG/USD Range-Bound Ahead of May CPI Release

Silver (XAG/USD) is trading sideways near the $36.50 mark in Wednesday's European session as investors exercise caution ahead of the US Consumer Price Index (CPI) release for May. The data, due at 12:30 GMT, is expected to show signs of mounting price pressure—something that could significantly influence the Federal Reserve’s (Fed) interest rate path.

US Inflation Expectations Could Limit Fed Rate Cuts

Forecasts suggest that headline CPI will rise 2.5% YoY, up from 2.3% in April. Core CPI, which strips out food and energy prices, is anticipated to climb 2.9% YoY, slightly higher than April’s 2.8%. These readings would reinforce the Fed’s current hawkish pause, delaying potential rate cuts and thereby capping upside in precious metals like Silver.

Geopolitical Sentiment and Trade Developments Also in Focus

US Commerce Secretary Lutnick commented that both Washington and Beijing plan to ease export restrictions, adding a positive tone to market sentiment. However, Silver remains largely driven by macro data expectations and interest rate projections, particularly as investors await clarity on Trump-era economic policies and their inflationary effects.

Technical Outlook: Neutral Bias Holds

From a technical perspective, XAG/USD remains within a tight range, lacking momentum ahead of the CPI catalyst. A break above $36.75 may signal fresh bullish intent, while a drop below $36.20 could open the door to a short-term correction.

Key Levels to Watch:

• Support: $36.20, $35.80
• Resistance: $36.75, $37.10

Internal Linking Suggestions for Tredu.com:

• Live Silver Price Chart
• How Inflation Affects Commodity Prices
• XAG/USD Technical Analysis Today
• US Inflation and Fed Rate Policy Explained