Silver Price Analysis: XAG/USD consolidates near $22.00, within weekly ranges as traders eye US CPI

• Silver is trading near $22.00 per troy ounce, well within this week’s ranges.
• XAG/USD has traded subdued so far this week, much as with other asset classes, ahead of US CPI on Friday.

Spot silver (XAG/USD) prices continue to trade within recent intra-day ranges amid a subdued tone to broader macro trading conditions. XAG/USD is currently trading near the $22.00 per troy ounce level, well within the $21.80-$22.50ish ranges that have prevailed over the past five sessions. The precious metal continues to fund support ahead of its 21-Day Moving Average around the $21.80 level.

Silver’s directionless feel reflects the price action being seen in other major asset classes (like US equities, US bond yields and the US dollar), which are all also locked within recent intra-day ranges amid a lack of notable fundamental catalysts, as traders keep their powder dry ahead of this Friday’s US Consumer Price Inflation (CPI) data.

While the upcoming CPI report is just one of many reports that the looks at to gauge US inflationary pressures, it is certainly one of the more important ones, with traders set to pay particularly keen attention to measures of core price pressures. Any signs of a further slowing in the MoM and YoY rates of core inflation would contribute to the growing sense that US inflation has now peaked.

Furthermore, this would come as a welcome development for the Fed, which may be able to slow the pace of monetary tightening from September following widely flagged consecutive 50 bps rate hikes in June (next week) and July. This would probably weigh on both the US dollar and US yields, which would come as a boost to precious metals like silver. In this bullish scenario, a test of and potential break above recent highs in the $22.50 area would be on the cards, with bulls eyeing a move towards $23.00 in the short term.