• XAG/USD dropped to its lowest level since mid-July, near the $23.10 area, below the 100-day SMA.
• The USD gained traction on the back of rising US yields following Friday’s losses.
• All eyes are now on Thursday’s CPI data from July from the US.

On Monday, the XAG/USD Silver spot price tumbled near the 100-day Simple Moving Average near the $23.20 area seeing more than 1.80% losses. Rising US yields and a stronger USD following Friday’s sell-off are mainly responsibles for the metal’s decline.

As the focus turns to the next set of inflation data from the US, markets continue to digest Friday's Nonfarm Payrolls (NFP) report. Job creation cooled down, and wages increased, but the investors dumping the US Dollar during Friday’s session indicated that investors weighted more the decrease in the number of people employed. Still, the Federal Reserve (Fed) will consider rising wage inflation in their next meetings. For the rest of the week, the highlight is the release of inflation data on Thursday, with the Headline Consumer Price Index (CPI) index expected to accelerate to 3.3% YoY and the Core CPI, which is seen falling to 4.7% in the same month.

In response, the US bond yields are edging lower. The 10-year bond yield stands at 4.08%, up by 1.04 % on the day. The 2-year yield stands neutral at 4.77%, and the 5-year yield is at 4.16% with 0.61 % gains.

Regarding the following Fed decisions, according to the CME FedWatch tool, markets discount higher odds of a pause in September with low odds of 20% of a 25 basis point (bps). Those probabilities rise to 30% in November, where the stronger case is also no-hike by the Fed.