Silver Price Forecast: XAG/USD Trades Firmly Near Two-Month High Of $86.50 Ahead Of US CPI

Silver price (XAG/USD) holds onto its almost week-long rally to near $86.50 during the Asian trading session on Tuesday. The white metal trades firmly even as oil prices are broadly stable amid fears that military actions between the United States (US) and Iran could resume.

According to a report from CNN, US President Donald Trump has grown increasingly frustrated with how the Iranians are handling talks to end the conflict, and some Trump aides say that he is now more seriously considering a resumption of major combat operations than he has in recent weeks.

The resumption of the war in the Middle East would prompt fears of a prolonged closure of the Strait of Hormuz, a vital passage to almost 20% of global energy supply.

Higher oil prices bode poorly for non-yielding assets, such as Silver, as they boost global inflation expectations, which discourage central bankers from easing monetary conditions.

Meanwhile, investors await the US Consumer Price Index (CPI) data for April, which will be published at 12:30 GMT. The CPI report is expected to show that the headline inflation rose to 3.7% Year-on-Year (YoY) from the previous reading of 3.3%.

This week, the major trigger for the Silver price and global markets would be the bilateral meeting between US President Donald Trump and Chinese leader Xi Jinping, which is expected during the May 13-15 period.

Silver technical analysis

XAG/USD trades at around $86.50 in the Asian trade. The white metal holds a firm bullish bias as it is well above the 20-day Exponential Moving Average (EMA) at roughly $77.90. The clustering of the spot above this short-term trend gauge suggests underlying demand remains constructive, while the Relative Strength Index (RSI) near 67 stays shy of overbought territory, hinting that upside momentum is strong and not yet exhausted.

On the downside, initial support is at the April 17 high of $83.06, with stronger backing at the 20-day EMA near $77.90, which reinforces the broader uptrend as long as it holds. Looking up, the Silver price aims to extend its advance towards $90.00, followed by the March 3 high of $92.06.