Silver (XAG) Forecast: Prices Climb as US Inflation Data Looms – Is $32.52 in Sight?
LONDON (August 12) Silver prices inched up on Monday as traders anticipate key US inflation data this week. The market is closely watching for signs that could influence the Federal Reserve’s next move on interest rates.
At 11:33 GMT, XAG/USD is trading $27.91, up $0.45 or +1.65%.
Rate Cut Expectations
Investors are currently pricing in a 49% chance of a 50 basis point rate cut by the Federal Reserve in September, according to CME Group’s FedWatch tool. This optimism stems from recent economic indicators and comments from Fed officials.
Fed Governor Michelle Bowman noted “welcome” progress on inflation, though she maintained that it remains above the 2% target. This slight softening of her typically hawkish stance has fueled speculation about potential rate cuts.
Upcoming Economic Data
Traders are focused on several key economic releases this week:
- Producer Price Index (PPI) on Tuesday
- Consumer Price Index (CPI) on Wednesday
- Retail sales figures on Thursday
- Housing starts data on Friday
These reports will provide crucial insights into inflation trends, consumer spending, and the overall health of the US economy.
Geopolitical Factors
Heightened geopolitical tensions are providing additional support for silver prices. Recent developments include:
- Russia evacuating civilians from areas bordering Ukraine
- Ongoing negotiations for a Gaza ceasefire deal
These factors contribute to market uncertainty, potentially boosting demand for precious metals as safe-haven assets.
FXEmpire
