Silver Price Forecast: XAG/USD maintains position around $31.00 as traders await US CPI

• Silver price holds gains as investors exercise caution ahead of US Consumer Price Index (CPI) data due on Thursday.
• Fed Powell's neutral remarks on Wednesday provided support for non-yielding Silver.
• Renewed Israeli attacks could hinder efforts to negotiate a ceasefire agreement and bolster the demand for the safe-haven Silver.

Silver price (XAG/USD) gains ground for the third successive session, trading around $31.00 per troy ounce during the Asian hours on Thursday. This upside could be attributed to investors’ caution ahead of the release of the upcoming US Consumer Price Index (CPI) data for June, scheduled for release on Thursday, for more clarity on the Federal Reserve's (Fed) monetary policy direction. The higher interest rates negatively impact the demand for non-yielding assets like Silver.

Market forecasts generally predict that the annualized US core CPI for the year ending in June will remain steady at 3.4%. Meanwhile, headline CPI inflation is expected to increase to 0.1% month-over-month in June, compared to the previous flat reading of 0.0%.

Meanwhile, on Wednesday, Federal Reserve (Fed) Chairman Jerome Powell underscored the importance of closely monitoring the labor market, highlighting its significant deterioration. Additionally, Powell expressed confidence in the downward trend of inflation, following his remarks on Tuesday that emphasized the necessity of further data to strengthen confidence in the inflation outlook.

Additionally, Fed Chair Powell emphasized on Tuesday that a "policy rate cut is inappropriate until the Fed gains greater confidence that inflation is headed sustainably toward 2%." He also noted that "first-quarter data did not support the greater confidence in the inflation path that the Fed needs to cut rates."

On the geopolitical front, Israeli forces carried out an offensive in northern and central Gaza on Tuesday, which included an airstrike on a tent encampment, as reported by Reuters. Palestinian officials reported that at least 29 people, mostly women and children, were killed in the strike. The incident occurred as spectators gathered at a school grounds in Abassan, east of Khan Younis, where vendors were selling smoothies and biscuits.

This development has raised concerns about a possible escalation in the Middle East conflict and bolstered the appeal of safe-haven assets like Silver. Hamas, the militant group, warned that renewed Israeli attacks could disrupt efforts to negotiate a ceasefire in the Gaza conflict, with discussions slated to resume in Doha on Wednesday.