Silver Dips as Investors Await US Inflation Report, Strong Demand Persists

Silver prices (XAG/USD) dipped to $28.30 per troy ounce during Tuesday's Asian session, as investors adopted a cautious stance ahead of Wednesday's US inflation report. This report is expected to offer clues on potential interest rate cuts by the Federal Reserve in September.

As a non-yielding asset, silver's price is sensitive to interest rate shifts. While a rate cut could reduce the opportunity cost of holding silver, the market remains in a wait-and-see mode for now.

Despite the current bearish sentiment, silver demand stays strong due to its critical role in technology, including solar panels and artificial intelligence (AI). These broad applications could help prevent further price drops in the near future.