Silver came under renewed selling pressure in the previous session as oil prices climbed to fresh weekly highs, although the metal has since trimmed some of its losses. The Middle East situation remains largely unchanged, with Houthi attacks on Saudi Arabia continuing and US-Iran negotiations still at an impasse.

This backdrop is likely to keep a lid on silver's upside unless the Federal Reserve adopts a more dovish stance, which would drag down real yields and the US dollar. That channel matters for silver because the metal is quoted in US dollars and pays no yield itself: falling real yields reduce the opportunity cost of holding it, while higher yields and a firmer dollar tend to weigh on it.

US CPI in Focus

Looking ahead, US-Iran negotiations will remain in focus, but tomorrow's US CPI report could prove a major catalyst should the data deviate from expectations. The CPI is one of the inflation gauges the Federal Reserve follows most closely, and its core measure strips out volatile food and energy prices to give a cleaner read on underlying price pressures. A higher-than-expected core CPI print could raise the odds of a Fed rate hike in October, putting further pressure on silver prices. Conversely, a soft report could offer the precious metal some short-term support, although it would not change the bigger picture just yet.

Technical Analysis – Daily Timeframe

On the daily chart, silver has been consolidating around the lows, with a downward trendline that could act as resistance. If the price pulls back into the trendline, sellers can be expected to lean on it, with a defined risk placed above it, to position for a drop into the 55.0 level. Buyers, on the other hand, will want to see the price breaking higher to increase bullish bets into the 71.55 level next.

Technical Analysis – 4-Hour Timeframe

On the 4-hour chart, the price recently broke above the minor downward trendline that had been defining bearish momentum on this timeframe. That is a sign of fading momentum and could precede a bigger pullback. A strong resistance zone sits around the 62.00 level. If the price reaches it, sellers can be expected to step in, with a defined risk above the resistance, to position for a drop into the 55.00 level. Buyers, meanwhile, will want to see the price breaking higher to increase bullish bets into the major downward trendline.

Technical Analysis – 1-Hour Timeframe

On the 1-hour chart, if the price rallies into the resistance and makes a new higher high, a minor upward trendline defined by the dotted line could take shape. If the price then rejects the resistance and pulls back into that upward trendline, buyers can be expected to lean on it, with a defined risk below it, to keep pushing into new highs. Sellers, on the other hand, will look for a break of the trendline to increase bearish bets into the 55.00 level next. The red lines on the chart define the average daily range for today.

Upcoming Catalysts

Tomorrow brings the US CPI report. On Thursday, the economic calendar features the US PPI, US Retail Sales and the latest US Jobless Claims figures.