Silver Price Forecast: XAG/USD rises to near $66.40 as US Dollar declines, US CPI in focus

Silver price (XAG/USD) is up almost 1% to near $66.40 during the Asian trading session on Wednesday. The white metal strengthens as the US Dollar remains under pressure despite expectations that the Federal Reserve (Fed) could raise interest rates at the policy meeting next week.

At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades slightly lower to near 98.76. The USD Index is closer to its two-week low of 98.72 posted on Tuesday.

A lower US Dollar makes the Silver price a favorable risk-reward bet for investors.

According to the CME FedWatch tool, traders see a 60% chance that the Fed will raise interest rates in the September policy meeting. Hawkish Fed bets are propelled by a stronger-than-expected United States (US) Nonfarm Payrolls (NFP) report for August released on Friday.

Meanwhile, investors await the US Consumer Price Index (CPI) data for August scheduled for Friday to get fresh cues regarding the Fed’s monetary policy outlook.

TD sees core inflation easing but flags upside risks from tariffs

According to TD Securities, core inflation likely continued to moderate in August, with the bank projecting that "core CPI rose 2.3% on a y/y basis, down 10 bps vs July," while "headline inflation likely stayed unchanged at 3.4% y/y." However, the economists caution that "we see the risks to our forecasts as skewed to the upside given that we're assuming a number of large price declines in tariff-exposed goods categories."

Silver Technical Analysis

In the daily chart, XAG/USD trades at $66.42. The metal trades close to the 20-period Exponential Moving Average (EMA) at $65.79, reflecting a sideways trend.

The 14-period Relative Strength Index (RSI) at 53.68 sits in neutral-positive territory, suggesting modest bullish momentum rather than overbought conditions.

On the downside, initial support is seen near the August 19 low at $62.19, followed by the psychological level of $60.00. Looking up, the June high at $71.56 appears to be a strong barrier for the Silver price bulls.