Silver (XAG) Forecast: Silver News Focuses on PCE—Here’s What Traders Should Watch

Silver Prices Eye Volatility as PCE Report Looms

Silver traders are on edge heading into the Friday release of the U.S. Personal Consumption Expenditures (PCE) inflation report, with price action tightly coiled around key technical levels. After touching a multi-year high at $45.23, spot silver has pulled back slightly as the market awaits inflation data that could recalibrate the Fed’s policy stance—and trigger significant price swings.

At 10:56 GMT, XAG/USD is trading $45.02, down $0.16 or -0.36%.

Fed Rate Cut Odds Under Pressure From Hotter U.S. Data

Expectations for a dovish Fed have cooled sharply this week. Revised second-quarter GDP showed stronger-than-expected growth, jobless claims fell, and new home sales jumped 20% in August—collectively challenging the case for immediate policy easing. Adding to the pressure, Kansas City Fed President Jeffrey Schmid reinforced the hawkish tone, noting that current monetary policy is only “slightly restrictive” and that inflation is still too elevated.

These developments have pushed rate cut expectations lower. CME FedWatch shows the odds of an October cut dropping from 92% to 85.5% in recent sessions, strengthening the dollar and adding pressure to rate-sensitive assets like silver.

Tariffs Add a Layer of Inflation Risk

Complicating the Fed’s calculus is the inflationary impact of recent tariffs. Goldman Sachs estimates they added 0.10 percentage points to August’s PCE, and expects year-over-year inflation to hit 3.2% by year-end. While core PCE is forecast to cool to 0.21% month-over-month from July’s 0.27%, the lagging effect of tariffs on broader prices adds uncertainty to any downside inflation surprise.

Morningstar and Vanguard analysts both flagged that tariff effects are likely still working their way through the system, raising the stakes for Friday’s inflation print.

Silver Levels to Watch: $43.18 to $49.81

Technically, the PCE report is a potential catalyst for a decisive move in silver. A weaker-than-expected print could trigger a rally above the recent $45.23 high, opening the door to test $49.81.

On the downside, stronger inflation data may pressure silver below the $43.18 pivot, exposing supports at $41.14, $40.73, and $40.40. The 50-day moving average at $39.84 remains the key downside target if selling accelerates.

Traders Brace for High-Impact Inflation Surprise

With inflation still well above the Fed’s 2% target and the dollar strengthening, silver remains vulnerable to the direction of Friday’s PCE data.

A softer print may reignite rate cut speculation and lift precious metals, while any upside surprise could prompt a deeper pullback.

Traders should prepare for heightened volatility around the release, with technical levels offering clear guidance for positioning.

More Information in our Economic Calendar.