Silver (XAG) Forecast: Volatility Looms with Powell, CPI Delay, and Tariff Tensions Rising

Silver Holds Firm Above $50 as Traders Watch Powell and CPI Timing

Silver rallied for a second straight week, with XAG/USD settling at $50.28 — up $2.29 or 4.77%. The metal is now comfortably above the long-standing $49.81 ceiling and holding its ground near decade-plus highs. Bulls still control the tape, but with stretched sentiment and fresh headlines on deck, this rally’s next leg depends on how the week shakes out.

Rate Cut Bets Stay Firm as Powell Steps Into the Spotlight

The market continues to lean heavily into rate cut expectations. CME FedWatch shows traders are pricing in a 95% chance of a 25-basis-point cut at the next FOMC meeting on October 29. But with the government shutdown dragging into its fourth week, critical data releases — including the September CPI — have been delayed, leaving markets in the dark.

That’s why Tuesday’s scheduled appearance from Fed Chair Jerome Powell at the National Association for Business Economics is getting so much attention. With jobs data pushed back and inflation still labeled “somewhat elevated” in the last Fed statement, Powell’s tone could carry more weight than usual. If he hints the Fed is prioritizing labor risks over inflation stickiness, silver could catch another wave higher.

The September CPI report has now been rescheduled to October 24. Until then, the market’s flying blind on inflation — and that adds risk on both sides.

Tight Physical Supply Still Holding the Floor

Beyond the rate speculation, the story under the hood remains bullish. Silver is trading in backwardation, with December 2025 futures more than $2 below spot. That kind of pricing doesn’t happen often — it suggests physical demand is outstripping supply, and the squeeze isn’t letting up. ETF inflows remain strong, and word is physical metal is getting harder to come by.

Outlook: Bulls in Control, But Watch Powell and Tariffs

More likely than not, silver still wants higher — especially if Powell leans dovish. A clean break above $51.24 could open the door to $52 or even $54. On the flip side, if Powell talks tough or hints at policy patience, expect some profit-taking back toward $49.28 or $47.33.

Also in play: renewed trade war noise. Trump’s threat of sweeping new tariffs on China has reintroduced headline risk, and any escalation there could push safe-haven demand — and silver — even higher. Time will tell.

More Information in our Economic Calendar.