Silver Under Pressure, Dollar & US CPI Key
Silver weakened slightly and held around $41 per ounce on Thursday, near a 14-year high, as markets awaited the US CPI release, which could guide Fed policy expectations next week. In the Asian session, XAG/USD trended flat above $41 after rallying earlier in the week, reflecting market caution ahead of key inflation data.
The next major catalyst is August CPI, following the surprise 0.1% month-on-month decline in PPI in August. Consensus had forecast CPI readings of +0.3% month-on-month and 2.9% year-on-year, with core readings of 3.1% year-on-year. The more benign PPI report eased concerns about tariff-driven price spikes and bolstered expectations of Fed policy easing.
The market now rates a 25 bps cut as the primary scenario, with a 50 bps cut remaining remote. A simple scenario: a lower CPI could weaken the dollar/yield, and silver could retest recent highs around $41.6; A higher CPI raises the risk of a correction below the $41 support level. The short-term direction will be heavily influenced by the reaction of the USD and real interest rates following the data release.
Source: Newsmaker.id
