Silver Price Forecast: XAG/USD holds $29 with eyes on US Inflation and Fed’s policy outcome

LONDON (June 12) Silver price (XAG/USD) steadies above its crucial support of $29.00 in Wednesday’s European session. The white metal is little changed ahead of the United States (US) Consumer Price Index (CPI) data for May and the Federal Reserve’s (Fed) interest rate decision, which are scheduled in the North American session.

Also, the US Dollar and bond yields pause as investors brace for crucial events. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, edges down to 105.20. 10-year US Treasury Yields steady near 4.40%.

Investors will pay close attention to the US inflation to know whether the progress in the disinflation process has resumed. The CPI data expectedly decelerated in April after remaining stubbornly higher in the first quarter of the year.

Meanwhile, the Fed is expected to remain status quo for the seventh straight time. The major trigger for global markets will be the Fed’s dot plot that indicates where policymakers see Federal fund rates heading in medium and longer-term timeframe.

The dot plot is expected to show fewer rate cuts this year from March’s forecast, given strong labor market conditions and weak confidence of officials on progress in the disinflation process.  

FXStreet