Silver Price Forecast: XAG/USD rises above $36.30 amid heightened Middle East geopolitical tensions

• Silver price gains traction to near $36.30 in Thursday's early Asian session. 
• Cooler-than-expected CPI boosts Fed rate cut expectations. 
• Rising geopolitical risks could support the Silver price in the near term. 

The Silver price (XAG/USD) attracts some buyers to around $36.30, snapping the two-day losing streak during the Asian trading hours on Thursday. The weaker US Dollar (USD) and escalating geopolitical tensions in the Middle East provide some support to the white metal. Traders will keep an eye on the US Producer Price Index (PPI) and weekly Initial Jobless Claims, which will be released later on Thursday. 

Softer-than-expected US inflation in May has prompted traders to raise their bets on a Federal Reserve (Fed) rate cut. This, in turn, drags the Greenback lower and lifts the USD-denominated commodity price. The CME FedWatch tool showed the markets have priced in nearly a 68% possibility that the US central bank would cut rates by 25 basis points (bps) by September, compared with 57% before the US CPI data. They now also see a still small but rising chance of an earlier rate cut, putting about an 18% odds of that happening in July versus about 13% earlier on Wednesday.

Reuters reported on Wednesday that the United States (US) is planning a partial evacuation of its Iraqi embassy and will allow military dependents to depart places around the Middle East, citing security risks in the region. Geopolitical risks could underpin the Silver price as investors seek more holdings in safe-haven assets.

On the other hand, White House envoy Steve Witkoff is scheduled to meet Iranian Foreign Minister Abbas Araghchi in Muscat on Sunday and discuss the Iranian response to the recent US proposal, per Axios. Any positive developments surrounding a deal over the nuclear program between the US and Iran might cap the upside for the Silver.