Silver price (XAG/USD) trades back and forth in a narrow range around $22.70 in the late Asian session on Tuesday. The white metal struggles for a direction as investors await the United States Consumer Price Index (CPI) data for January, which will be published at 13:30 GMT.
S&P500 futures remain on the backfoot in the Tokyo session, indicating a decline in the risk appetite of the market participants. The US Dollar Index (DXY) remains positive but struggles to extend upside above the crucial resistance of 104.25. 10-year US Treasury yields rise to 4.18%.
The US inflation data is expected to impact the outlook for interest rates. As per the CME Fedwatch tool, traders bet for a rate cut by 25 basis points (bps) in May. A significant decline in the inflation data would prompt expectations of an early rate cut by the Federal Reserve (Fed).
In the last monetary policy statement, Fed Chair Jerome Powell ruled out expectations of a rate cut in March as the central bank is unconvinced about inflation declining towards the 2% target. Also, Fed policymakers have not favored aggressive rate cuts as they could increase price pressures again.
Silver price faces pressure while extending recovery above the downward-sloping trendline plotted from December 22 high at $24.60. The asset manages to sustain above the 50-period Exponential Moving Average (EMA) at $22.63, which indicates that the near-term outlook is bullish.
The 14-period Relative Strength Index (RSI) aims to move above 60.00. A bullish momentum would get triggered if the RSI (14) manages to do so.