Silver Price Analysis: XAG/USD consolidates around $23 as focus shifts to US Inflation data

Silver price (XAG/USD) trades back and forth around $23.00 in the New York session. The white metal has remained inside the woods for the past four trading sessions as investors have been sidelined ahead of the United States inflation data for August, which will be published on Wednesday at 12:30 GMT.

The S&P500 has opened on a bearish note as investors remained cautious about the US Consumer Price Index (CPI). Investors remain worried about the inflation outlook due to stronger wage growth and a steady labor market. Inflation in excess of the desired rate of 2% seems most persistent and won’t be easily contained by the Federal Reserve (Fed). This would keep hopes of one more interest rate increase from the Fed alive.

The US Dollar Index (DXY) recovered significantly to near 104.90 but is struggling to extend the upside as investors await the US CPI data for further guidance. As per the estimates, US headline inflation is seen expanding at a stronger pace of 0.6% due to recovered gasoline prices. The core CPI that doesn’t inculcate volatile oil and food prices is expected to grow at a steady pace of 0.2%.

Silver technical analysis

Silver price remains sideways in a range of $22.80-23.20 from the past four trading sessions ahead of the US inflation data. The white metal demonstrates a volatility squeeze, which is being followed by a breakout in the same. The 100-period Exponential Moving Average (EMA) at $23.17 continues to act as a major barricade for the Silver price bulls. Horizontal support is plotted from August 15 low at $22.23.

The Relative Strength Index (RSI) (14) skids into the bearish range of 20.00-40.00, which indicates that the bearish impulse has been triggered.

Silver hourly chart