Silver Price Forecast: XAG/USD declines to near $75 at the start of the week

Silver price (XAG/USD) trades 2% lower at around $75.00 during the Asian trading session on Monday. The white metal is under pressure as lower-than-expected United States (US) Consumer Price Index (CPI) data for January fails to prompt hopes of interest rate cuts by the Federal Reserve (Fed) in the near term.

Theoretically, lower inflation boosts hopes of monetary policy easing by the Fed in the near term. It seems that market participants are more focused on the labor market than on changes in price pressures.

According to the CME FedWatch tool, traders remain confident that the Fed will keep interest rates steady in the current range of 3.50%-3.75% in March and April.

The data showed on Friday that the US headline inflation cooled down to 2.4% Year-on-year (YoY) from 2.7% in December. On a monthly basis, the US headline CPI grew at a slower pace of 0.2% against estimates and the prior reading of 0.3%.

On the geopolitical front, investors remain concerned over tensions between the US and Iran. A report from Reuters has stated that the US military is preparing for the possibility of sustained, weeks-long operations against Iran if President Donald Trump orders an attack, a scenario that would force investors to shift to the safe-haven fleet.