Silver is entering a pivotal trading week, with prices holding firm above key support as traders await the July U.S. CPI report. The inflation data, due this week, could be the deciding factor in whether XAG/USD pushes toward a new 14-month high at $39.53 — or slips back toward the $36 support zone.
📌 Weekly Recap – Fed Rate Cut Bets Fuel Silver’s Momentum
Silver ended last week at $38.33, gaining 3.52% as traders sharply raised expectations for a Federal Reserve rate cut in September.
- Jobs Data Sparks Dovish Shift: The August 1 Nonfarm Payrolls report revealed just 73,000 jobs added in July, alongside steep downward revisions for June. This drove rate-cut odds above 90%, weakening the U.S. Dollar and supporting silver prices.
- Tariff Uncertainty Adds Safe-Haven Demand: New U.S. tariffs ranging from 10% to 100% on goods from multiple trading partners further boosted demand for silver as a risk hedge.
- Fed Board Nomination Signals Softer Policy: President Trump’s nomination of Stephen Miran to the Fed reinforced expectations of a more dovish central bank.
However, China’s stagnant manufacturing PMI remains a headwind, limiting silver’s industrial demand outlook and preventing the metal from fully matching gold’s recent rally.
📅 CPI – The Market’s Next Big Test
This week’s CPI release is the key driver for silver’s next move:
- If CPI is softer than expected → Fed rate-cut bets strengthen, silver could break $39.53 and potentially extend toward $40+.
- If CPI is hotter than expected → The dollar could rebound, yields may rise, and silver might retreat toward $36.21 or even $35.28 before bargain buying returns.
📊 Technical Outlook for XAG/USD
- Key Weekly Pivot: $37.87 — holding above keeps the bullish bias intact.
- Upside Targets: $39.53 (major resistance) • $40.00 psychological barrier.
- Downside Supports: $36.21 • $35.28.
The chart structure remains bullish for now, but CPI results will likely set the tone for the rest of the month.
🧐 Forecast Summary
With rate-cut odds above 90%, a weaker U.S. Dollar, and safe-haven demand still in play, silver enters the week with a bullish tilt. If CPI aligns with the dovish narrative, a breakout above $39.50 is on the table. If not, a pullback toward the mid-$36 range is the likely scenario before fresh value buyers step in.
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