Silver (XAG) Forecast: Bullish Setup Intact as CPI Looms as Key Catalyst

CPI Forecast Points to Inflation Rebound

Silver (XAG/USD) is trading at $38.40 ahead of Tuesday’s June CPI release at 12:30 GMT, with traders eyeing a move toward the psychological $40.00 level. With support at $35.28 and a strong technical profile, silver is well-positioned — but its next move hinges on how sharply inflation rises in response to new tariffs.

FactSet consensus sees a 0.23% monthly increase in headline CPI and 0.30% in core inflation. That would lift the annual rate to 2.7%, up from 2.4% in May — the first major signal that Trump-era tariffs are feeding into consumer prices. Analysts expect this CPI print to shift both Fed expectations and dollar positioning in the short term.

Tariff-Driven Pressures Stir Market Volatility

The U.S. average tariff rate surged from 2.5% to 25% earlier this year, now sitting near 14%. Economists at Goldman Sachs expect price pressures to surface in goods like apparel and electronics. Pantheon Macroeconomics called the expected boost in CPI “undeniable.” The tariff impact is also preventing the Fed from easing policy, according to Fed Chair Jerome Powell.

Three CPI Outcomes, Three Silver Paths

Scenario 1 – Hot CPI (Above 0.30%)

• Fed cut odds decline; real yields rise
  • Dollar gains pressure silver
  • Break below $35.28 opens path to $32.10

Scenario 2 – In-Line CPI (0.23%–0.30%)

• Silver likely consolidates near $38.40
  • Support at $35.28 holds
  • Traders shift focus toward $40.00

Scenario 3 – Soft CPI (Below 0.23%)

• Rate cut odds surge above 60%
  • Dollar weakness lifts silver
  • Breakout toward $40.00 and $44.10 possible

Dollar, Yields, and Technical Setup

Yields are moving higher — 10-year at 4.423%, 30-year at 4.961% — pricing in inflation risk. DXY remains capped unless it breaks above 98.88, limiting upside for the dollar. Silver’s bullish structure remains intact above $35.28, with the 52-week average well below at $32.10.

Outlook: CPI Print Will Set the Tone

With silver already trading above its breakout level from earlier this year, Tuesday’s CPI will determine whether it extends toward $40.00 or reverses. Ongoing industrial demand, a fifth consecutive annual deficit, and strong central bank gold buying create a solid backdrop. But short-term, it’s all about the number. Traders should be ready for a directional move off the release.

More Information in our Economic Calendar.