Silver Price Forecast: XAG/USD trades flat around $66.60 ahead of US data

Silver price (XAG/USD) trades in a tight range at around $66.67 during the Asian trading session on Tuesday. The white metal consolidates as investors await the United States (US) ISM Manufacturing PMI data for August and the JOLTS Job Openings data for July, which will be published at 14:00 GMT.

The Manufacturing PMI is expected to arrive at 55.2, lower than 55.6 in July. Meanwhile, fresh jobs posted by US employers are seen marginally lower at 7.3 million from 7.359 million in June. The Job Openings data is expected to have a meaningful influence on Federal Reserve (Fed) interest rate expectations.

Financial market experts see the August batch of Nonfarm Payrolls (NFP) and the Consumer Price Index (CPI) to drive Fed’s interest rate prospects significantly.

Fed hawkish tilt at Jackson Hole sets up data-driven September debate

Rabobank’s Elwin de Groot argues that Fed Chair Kevin Warsh’s Jackson Hole appearance was calibrated to shift expectations ahead of the September meeting. In his view, “Warsh’s prepared remarks seemed designed to lift rate-hike expectations, rebalance the September debate towards the hawks and rebuild his inflation-fighting credibility after July’s ‘all talk, no action’ criticism.” However, Rabobank cautions that this strategy “creates a difficult balancing act, as the White House may oppose a hike so close to November’s midterms.”

Even so, de Groot highlights that “Warsh delivered an important signal: the Fed is not relying on tighter financial conditions alone and remains willing to tighten further if underlying inflation stalls.” Against that backdrop, Rabobank judges that “the next round of data – especially the 4 September employment report and 11 September CPI – could therefore prove crucial for the Committee’s swing voters,” potentially determining whether the hawkish messaging translates into actual policy action.

On the geopolitical front, higher oil prices due to the restart of the Middle East war could act as a major headwind for the Silver price. The WTI Oil price jumped to near $85.85 in the Asian session on Tuesday, the highest level in over a week.

Higher energy prices prompt fears of accelerating global inflation expectations, a scenario that forces investors to ramp up hawkish central banks’ bets. This bodes poorly for non-yielding assets, such as Silver.

Silver Technical Analysis

In the daily chart, XAG/USD trades at $66.59. The pair holds a bullish near-term bias as it advances above the 20-day exponential moving average (EMA), which comes in at $65.71 and now acts as underlying demand.

The Relative Strength Index (RSI) at 55.05 stays in neutral-to-positive territory, suggesting steady, rather than aggressive, buying pressure as price consolidates above its short-term trend marker.

On the downside, immediate support is located at the 20-day EMA at $65.71, with the August 9 low at $62.19 acting as the next major cushion. Looking up, the white metal needs a decisive breakout above the June 17 high at $71.56 to extend the advance.