Silver (XAG) Forecast: Silver Market Braces for Core PCE—Bullish Setup Intact

Silver Holds Breakout Ahead of Key Inflation Data—$39.53 in Focus

Silver closed out the week with bullish momentum intact, cementing a confirmed breakout on the weekly chart above $37.87. The move was fueled by Federal Reserve Chair Jerome Powell’s dovish lean at Jackson Hole, which reignited rate cut expectations and eased pressure from real yields.

With the Fed shifting toward employment as its core concern and critical inflation data on deck, silver enters the final week of August on firm footing.

Last week, XAG/USD settled at $38.87, up $0.86 or +2.26%.

Powell Emphasizes Labor Market Risk—Market Sees Green Light

The market interpreted Powell’s Jackson Hole remarks as a signal that the Fed is preparing to ease policy if labor market weakness continues. While he did not commit to a September cut, futures pricing now reflects a 91% probability of a 25-basis-point reduction.

This shift followed softer jobless claims data and growing cracks in employment indicators, which Powell explicitly flagged as a downside risk to growth.

The Fed appears more comfortable letting inflation run slightly above target in the short term—particularly as it digests the delayed impact of tariffs and sticky wage costs. Traders expect more clarity later this week as several key reports land.

PCE Inflation and Waller’s Speech Could Steer Fed Bias

Traders are watching Thursday’s weekly jobless claims report closely after last week’s stronger print raised concerns about the Fed’s reaction function. But the bigger trigger will be Friday’s release of the July PCE and Core PCE Indexes, both forecast at 0.3%. These are the Fed’s preferred inflation gauges and could reinforce or undercut current rate cut expectations.

Also on tap is commentary from Fed Governor Christopher Waller—a notable voice on the FOMC—who speaks Thursday evening. Any hawkish lean from Waller could complicate silver’s bullish setup, particularly if Friday’s inflation readings come in hot.

Technical Structure: Bullish Breakout, Eyes on $39.53

The weekly breakout above $37.87 confirms a bullish structure. That level now serves as the first major support, with added downside protection from swing bottoms at $36.96 and $36.21. Stronger structural backing is anchored at $35.28, while the 52-week moving average at $32.89 sits well below current price action.

On the upside, silver is positioned to challenge the 14-year high at $39.53. A decisive close above that mark could open the path toward $44.22, a major technical target with no intermediate resistance visible on the weekly chart.

Forecast: Bullish Bias Maintained, Eyes on Fed Data and $39.53

As long as silver holds above $37.87, the path of least resistance remains higher. Upcoming labor and inflation data will determine whether rate cut pricing remains intact, but for now, the technical and fundamental picture both point toward higher ground.

A confirmed break above $39.53 would likely accelerate the move toward $44.22, while failure to hold $37.87 would neutralize the breakout and expose lower supports.

Traders should stay focused on the PCE Index and any signals from Fed officials. For now, silver’s bullish bias is justified—and intact.

More Information in our Economic Calendar.