Silver Price Analisis: XAG/USD holds in positive territory after US CPI and Fed speakers

XAG/USD recovered somewhat and rose above $22.50, hitting a daily high near $23.00.
US Treasury yields weakened after Core CPI decelerated in July but then recovered.
Fed speakers didn’t deliver any highlights.

In Thursday’s session, the XAG/USD recovered ground but is limited by a resilient USD. In addition, American yields recovered from their initial backdown seen after the release of July’s inflation figures from the US and limited Silver’s advance.

According to the latest data from the US Bureau of Labor Statistics, the Consumer Price Index (CPI) for July demonstrated a month-on-month (MoM) increase of 0.2%, aligning with expectations. The annual gauge declined to 3.2% YoY, slightly below the anticipated 3.3%. Likewise, the Core CPI, which excludes volatile components, also saw a 0.2% increase for the same period as projected. On a yearly basis, the Core CPI measure registered a decrease of 4.7% YoY, coming in slightly lower than the expected 4.8%. Moreover, Jobless Claims, a weekly measure which tracks the number of people filling for unemployment benefits, picked up in the first week of August. The figure came in at 248,000, higher than the expected 230,000 and the last weekly figure of 227,000.

After seeing declines due to soft inflation data, US Treasury yields sharply rose in the middle of the American session, with the 2-year yield rising to 4.85% and the 5 and 10-year rates to 4.23% and 4.10%, limiting the grey metal’s advance.

Regarding the next Federal Reserve (Fed) decision, as for now and according to the CME FedWatch tool, markets continue to price low odds of a hike in September and Novemeber, but incoming data will be the ones which shape the expectations for the next Fed meetings. In that sense, monetary policy expectations will dictate the pace of the US bond markets and hence the short-term trajectory of the precious metals.

XAG/USD Levels to watch

Analysing the daily chart, the XAG/USD technical outlook is bearish in the short term. The Relative Strength Index (RSI) is comfortably positioned below its midline in negative territory. It has a southward slope, indicating a favourable selling momentum. It is further supported by the negative signal from the Moving Average Convergence Divergence (MACD), displaying red bars, underscoring the growing bearish momentum. Additionally, the metal is below the 20,100,200-day Simple Moving Averages (SMAs), which suggests that the bears are in command of the broader picture.

Support levels: $22.50, $22.30, $22.00.

Resistance levels: $23.25 (200-day SMA), $23.50, $23.70, $24.00.