Silver Price Forecast: XAG/USD starts US CPI week on flat note around $63.50

Silver price (XAG/USD) trades in a tight range at around $63.50 during the Asian trading session at the start of the week. The white metal struggles for a direction but is close to an almost seven-week high of $65.16 posted on Friday.

Bullions are expected to face heightened volatility, with the United States (US) Consumer Price Index (CPI) data for July on the radar, releasing on Wednesday.

The impact of the US CPI data will likely be significant on the Federal Reserve (Fed) interest rate expectations, as comments in the July monetary policy statement signaled that officials are heavily concerned about high inflation and are committed to bringing price pressures down to the 2% target.

Higher US inflationary pressures prompt Fed interest rate hike risks, a scenario that bodes poorly for non-yielding assets, such as Silver.

On Friday, the Silver price gained sharply as traders scaled back hawkish Fed bets for the September policy meeting after the release of the US Nonfarm Payrolls (NFP) data for July, which showed a reduction in the overall labor force.

According to the CME FedWatch tool, the odds of the Fed raising policy rates in the September meeting are 46%, a sharp decline from 67% seen a week ago.

The US NFP report showed employers fired 23K workers, while they were anticipated to create 80K fresh jobs. Also, June’s NFP print was revised lower to 20K from 57K.