Silver Rally Extends as Softer Dollar Supports XAG/USD

Key Moments

Macro Drivers: Dollar Weakness and Yields Pullback

Silver prices (XAG/USD) are advancing, with the spot rate up 1.25% and hovering near $67.00 in Asian trading on Tuesday. The move comes as the US Dollar and US Treasury yields come under pressure, prompting investors to increase exposure to non-yielding precious metals.

The US Dollar Index (DXY), which tracks the performance of the Greenback against a basket of six major currencies, trades 0.1% lower around 98.83. This comes even after the index retraces part of its earlier intraday losses. At the same time, yields on 10-year US Treasuries slip 0.17% to approximately 4.77%.

The decline in US bond yields improves the relative attractiveness of assets that do not provide a coupon or interest payment, such as Silver. This backdrop, combined with a softer Dollar, is providing a supportive environment for XAG/USD.

Focus Turns to US Inflation Data: PPI and CPI in View

Investor attention is increasingly centered on the upcoming US inflation releases for August. Market participants are positioning ahead of the Consumer Price Index (CPI) data scheduled for Friday, which is expected to offer fresh insight into the Federal Reserve’s prospective policy path.

Before the CPI figures, traders will scrutinize the August Producer Price Index (PPI), due for release on Thursday. Both reports are being monitored for confirmation of inflation trends that could shape expectations around future interest rate decisions.

The article notes that the US headline CPI is anticipated to remain relatively firm, with elevated energy prices seen as a key contributor.

TD Securities Outlook: Core Versus Headline CPI

TD Securities provides a detailed preview of the August CPI release, highlighting a divergence between core and headline inflation dynamics.

According to TD Securities, the August CPI report is likely to show that “underlying inflation stayed under control,” with core prices “rising 0.19% m/m (2.3% y/y).” The bank expects the “services segment” to be the main driver of gains, while “core goods prices likely acted as a drag by posting a modest m/m drop.”

In contrast, TD looks for “headline CPI” to post “a stronger 0.37% m/m (3.4% y/y) due to rising energy prices and a slight pickup in food inflation.” The bank also cautions that “risks to our forecasts” are “skewed to the upside,” noting that its projections assume “a number of large price declines in tariff-exposed goods categories, including apparel and household goods.”

Silver Price Action and Technical Landscape

On the daily chart, XAG/USD is quoted at $66.97. The pair maintains a constructive short-term tone, supported by price action holding above the nine-day Exponential Moving Average (EMA), currently at $66.49. This positioning implies that the latest retracement is being absorbed rather than signaling a full reversal of the preceding upswing.

The Relative Strength Index (RSI) stands near 55, reflecting a mildly bullish bias. This level indicates that upward momentum remains in place but has not yet moved into overbought territory.

On the downside, initial support is seen at the nine-day EMA around $66.49. A daily close below that level would signal scope for a deeper consolidation phase, with further levels not specified by the current set of indicators.

On the upside, the August peak at $71.12 is highlighted as a significant resistance zone that could present a challenge for bulls if the current advance extends.

The article adds that the technical analysis was prepared with the assistance of an AI tool and notes that the story was corrected on September 8 at 04:47 GMT to state in the title that Silver Price Forecast: XAG/USD jumps to near $67, not $37.