Silver (XAG) Forecast: CPI Data Could Ignite Next Silver Rally or Trigger Pullback

Silver Weekly Recap – Fed Cut Bets Surge, CPI Could Seal the Deal

Silver finished the week holding firm above key support as traders sharply increased expectations for a September Federal Reserve rate cut. The August 1 Nonfarm Payrolls report was the catalyst, showing just 73,000 jobs added in July and a steep downward revision for June.

Last week, XAG/USD settled at $38.33, up $1.30 or +3.52%.

That weak labor data pushed the probability of a cut above 90%, knocking the dollar lower and keeping Treasury yields pinned, both supportive for silver. New U.S. tariff measures ranging from 10% to 100% across multiple trading partners added a safe-haven bid, while President Trump’s nomination of Stephen Miran to the Fed Board reinforced the perception of a dovish tilt ahead.

China’s factory slowdown remained the key headwind, with PMI readings confirming a stagnant manufacturing sector. This industrial drag kept silver from fully matching gold’s monetary-driven rally, underscoring the split personality of a metal tied to both safe-haven and industrial demand.

Jobs Shock Set the Stage for CPI Showdown

The payrolls miss lit the fuse for a dovish Fed call, but this week’s CPI report will determine whether that view holds. A cooler inflation print would likely lock in a September cut, inviting aggressive buying in silver and clearing the path toward the 14-month high at $39.53. A hotter reading could force the Fed to pause, lift the dollar, and send silver back toward deeper support.

Rate-Cut or Roadblock – Data Will Drive the Trade

The Fed is now in wait-and-see mode, and CPI is the decisive next test. If price pressures are easing, the policy door swings open for stimulus that would bolster silver’s appeal. If inflation proves sticky, rate-cut hopes could unwind quickly, souring sentiment.

Technical Picture Favors the Bulls – For Now

Silver is holding above the critical $37.87 pivot. Maintaining that level keeps the bias upward, with $39.53 the major target. A break below $37.87 exposes $36.21, then $35.28 as stronger downside floors.

Forecast: The market leans bullish heading into CPI, with scope for a breakout toward $39.53 if the data backs rate-cut expectations. A strong CPI would flip the tone defensive, making a test of the $36 area likely before fresh value buying emerges.

More Information in our Economic Calendar.