Silver jumps more than 2% after US inflation meets expectations

Silver (XAG/USD) experiences a surge of over 2% on Wednesday, reaching approximately $66.00 per ounce in the current trading session. The precious metal benefits from a weaker US Dollar and lower US Treasury yields following the release of the US Consumer Price Index (CPI) data for July. The CPI rose by 0.1% month-over-month (MoM) and decreased to 3.4% annually from 3.5%, falling within market expectations.

Core inflation, excluding volatile food and energy prices, increased by 0.2% MoM and 2.5% year-over-year (YoY), also aligning with forecasts. The US Dollar Index (DXY) slipped slightly, while the 2-year Treasury yield declined by around four basis points, near 4.18%. Lower yields enhance the appeal of non-yielding assets like Silver by reducing their opportunity cost.

Meanwhile, a weaker US Dollar makes the USD-denominated metal more affordable for international investors. Despite the inflation figures not significantly impacting the Federal Reserve's monetary policy outlook, as headline inflation remains above the 2% target and elevated oil prices persist, geopolitical tensions in the Middle East provide further support for Silver.

Recent reports suggest ongoing disagreements between Iran and the US regarding the ceasefire agreement, indicating continued uncertainty in the region. This backdrop, combined with a weaker US Dollar, lower yields, and persistent geopolitical risk, maintains bullish momentum for Silver. The metal trades at $66.03 in the one-hour chart, staying above both the 100-hour and 200-hour SMAs, reinforcing a positive near-term bias.

Immediate support lies at the $65.57 trend-line, with resistance at $66.80. Technical analysis, assisted by an AI tool, indicates steady buying interest, with the 14-period RSI near 59, indicating no overbought conditions.