Similar to gold, silver's weakness is also linked to the uncertainty surrounding potential U.S. tariffs on imported silver. Last week, silver prices surged as traders digested rumors of tariffs on kilogram-level silver imports, but the upward momentum waned as the long-term implications became clearer. Market participants are awaiting the issuance of an executive order from the White House clarifying the policy, leading to a more than 2% decline in silver futures. This move could directly impact global silver liquidity, especially if refined silver imports are also affected by the policy. An additional catalyst is the upcoming release of the U.S. Consumer Price Index (CPI). Widespread market expectations are for core inflation to rise by 0.3% month-over-month, pushing the annual rate to 3%, still well above the Federal Reserve's 2% target. Weak data could diminish expectations of rate cuts, limiting silver's rebound. Conversely, soft data might provide the necessary justification for the market to push silver prices back above US$38.

The July CPI is expected to remain elevated, primarily driven by tariff impacts. The results will directly influence market pricing for a potential Fed rate cut in September and the number of rate cuts anticipated in 2025. Currently, the market assigns nearly a 90% probability to a rate cut in September, with expectations of up to three cuts next year. If CPI data remains moderate or shows signs of a new inflation slowdown, it could reinforce dovish expectations for the Fed, potentially weakening the dollar and supporting gold prices. Conversely, if inflation exceeds expectations and remains sticky, it could temper rate cut expectations, strengthen the dollar, boost U.S. Treasury yields, and dampen risk sentiment.

The silver price, in the 1D timeframe, shows Bollinger Bands contracting, with SMAs gradually flattening and prices oscillating around the middle band, indicating a potential trend reversal. The MACD histogram's upward momentum is waning, with the MACD line and signal line converging near the zero axis. The RSI stands at 53, not indicating overbought conditions. If the price cannot accelerate through the previous high of 39.53, a pullback may occur. Support levels are identified at the previous low and key psychological levels of 36.2 and 36, respectively. A swift breakout above these levels could open upward potential, with resistance at the 40 mark and the possibility of reaching 50. In the 1M timeframe, the MACD line and signal line have crossed near the zero axis and continue to ascend, while the Bollinger Bands are expanding upward, and the SMAs are diverging positively. This indicates that the bullish momentum remains robust, and the overall trend is still upward. The trading strategy is to initiate short positions initially, followed by long positions.

Trade Direction: Sell

Entry Price: 37.8

Target Price: 36.4

Stop Loss: 38.5

Support: 36.8, 36.2, 35

Resistance: 38.5, 39.4, 40