Silver price (XAG/USD) trades higher at around $67.60 during the Asian trading session on Thursday. The white metal reflects strength as the US Dollar is under pressure ahead of the United States (US) Producer Price Index (PPI) data for August, which will be published at 12:30 GMT.
As of writing, the US Dollar Index (DXY), which gauges the Greenbacks value against six major currencies, trades marginally lower to near 98.75. The USD Index is close to its two-week low of 98.60 posted on Wednesday.
A lower US Dollar makes the Silver price a favorable risk-reward bet for investors.
Investors will closely track the US producer inflation data to get fresh cues regarding the Federal Reserves (Fed) monetary policy outlook.
The US PPI report is expected to show that headline inflation at the factory level accelerated to 5.3% Year-on-Year (YoY) from 4.7% in July. The core PPI – which excludes volatile food and energy items – is also expected to arrive higher at 4.6% YoY against the previous reading of 4.2%.
Signs of price pressures accelerating at the producer level would prompt expectations of Federal Reserve (Fed) interest rate hikes in the near term, a scenario that diminishes the appeal of non-yielding assets, such as Silver.
This week, the major trigger for the Silver price and the US Dollar will be the US Consumer Price Index (CPI) data for August, which will be released on Friday.
Silver Technical Analysis
In the daily chart, XAG/USD trades at $67.60. The near-term bias appears bullish as price holds above the 20-day Exponential Moving Average (EMA) at roughly $66.02, suggesting the recent advance remains supported by the short-term trend.
The Relative Strength Index (RSI) around 56 keeps a positive yet not overbought tone, hinting that upside momentum is intact but not stretched.
On the downside, immediate support is seen at the 20-day EMA at $66.02, reinforcing a deeper demand zone if a pullback develops. Looking up, the August high at $71.12 is the critical hurdle for the Silver price.