Silver Price Forecast: XAG/USD rises to near $28.00, tracking rally in gold

• Silver price follows the rally in gold as global central banks increase their reserves.
• The price of Silver has advanced to its highest level since June 2021.
• The eased geopolitical situation in the Middle East could have limited the advance of Silver price.

Silver price advances for the third consecutive session, trading higher to near $28.00 per ounce during the early European hours on Tuesday. This surge in Silver price mirrors the rally in gold, driven by heightened consumer and industrial demand. Global central banks increasing their reserves in gold have also contributed to the increased appetite for precious metals.

Furthermore, the demand for non-yielding assets like silver is bolstered as US Treasury yields correct after two days of gains. At present, the 2-year and 10-year yields on US Treasury bonds stand at 4.78% and 4.39%, respectively.

Traders eagerly await the release of the US Consumer Price Index data scheduled for Wednesday. It is anticipated that the US headline CPI will accelerate in March, while the core measure is expected to show a cooling down. The industrial outlook for metals received a boost from strong manufacturing data from top consumer China and projections for increased solar installations.

However, Silver price could have faced downward pressure as geopolitical tensions have eased in the Middle East, following the withdrawal of most Israel Defense Forces from southern Gaza, possibly due to growing international pressure, has contributed to easing tensions. Additionally, peace talks between Israel and Hamas have resumed in Egypt

Traders will now shift their focus to the upcoming US inflation data and the release of FOMC minutes this week to gain more clarity on the timing of the Fed's monetary policy adjustments.