Silver Price Forecast: XAG/USD Weakens Toward $38.00 as Fed Signals Shift

Silver price forecast points to fresh weakness on Friday, with XAG/USD slipping toward $38.10 per troy ounce during Asian hours. The decline comes after modest gains in the previous session, as traders turn cautious ahead of Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium. His comments are expected to provide new signals on September’s policy outlook.

XAG/USD Pressured as Rate Cut Bets Cool

The latest silver price movement reflects changing expectations for U.S. monetary policy. According to the CME FedWatch Tool, markets now see a 75% chance of a September rate cut, compared to 82% earlier this week. Reduced odds of aggressive easing weigh on demand for non-yielding assets like silver, making the XAG/USD price forecast more uncertain in the short term.

Economic Data Sends Mixed Signals for Silver

U.S. economic releases added to the cautious sentiment. The preliminary S&P Global Composite PMI rose slightly to 55.4 in August from 55.1. The Manufacturing PMI climbed sharply to 53.3, beating both July’s 49.8 and market expectations of 49.5. Meanwhile, the Services PMI eased to 55.4 from 55.7 but still came in stronger than the 54.2 forecast.

Labor market data painted a softer picture. Initial Jobless Claims rose to 235,000, the highest in eight weeks and above the estimate of 225,000. This suggests that while parts of the economy remain resilient, the labor market could be losing momentum.

Fed Officials Signal Openness to Action

Comments from Fed officials added to the uncertainty. Chicago Fed President Austan Goolsbee said September’s meeting remains “open for action,” noting that policymakers face conflicting signals on inflation and growth. Boston Fed President Susan Collins also signaled openness to a rate cut as early as September, citing tariff headwinds and labor market risks despite ongoing inflation concerns.

In summary, the silver price forecast shows XAG/USD trading under pressure near $38.00. The market will closely watch Jerome Powell’s Jackson Hole speech for direction. A clear dovish signal could boost silver, while caution or hawkish remarks may keep the metal subdued in the near term.

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