Silver’s rally awaits CPI guidance, with data strength to determine short-term direction

(1) Analysts have pointed out that silver has been rising steadily since last Tuesday, mainly boosted by hopes for an agreement between the US and Iran, while a weaker-than-expected nonfarm payrolls report has provided additional support for silver prices. (2) However, the upward momentum appears to be weakening and may require further catalyst from today’s US CPI data to sustain the rally, with market focus centered on the core CPI month-on-month figure, expected to be around 0.2%. (3) The current CPI data has a crucial impact on the September FOMC decision as well as Federal Reserve Chairman Waller’s stance at the Jackson Hole seminar, and the results will dominate precious metals market risk appetite in the short term. (4) If core CPI comes in above expectations, it could trigger short-term selling of silver, prompting traders to increase bets on Fed rate hikes, while a stronger US dollar and US Treasury yields would put pressure on non-yielding assets. (5) Conversely, if the data is weak or even in line with expectations, it will help ease concerns about further tightening by the Fed, provide new upward momentum for silver, and may push silver prices to break out of their recent consolidation range. (6) Overall, silver is currently in a technically bullish but fundamentally catalyst-deficient wait-and-see stage, with the evening’s CPI data set to be a key trigger point for short-term direction, and traders need to closely monitor market reactions and position adjustments following the data release.