The U.S. Dollar Index (DXY) gained 0.61% over the week, closing near 98.46. However, gains were modest in the context of soft inflation data and firm rate-cut pricing. With further policy easing expected, upside in the dollar appears limited—an environment that typically supports dollar-denominated assets like silver.
Inflation and Trade Risks Support the Bullish Case
Consumer price data came in as expected, with headline CPI rising 0.3% month-over-month and core CPI up 0.2%. Producer prices were unchanged, offering no fresh pushback to dovish market expectations. The absence of inflation surprises has strengthened the case for easing, removing a major obstacle for precious metals.
Trade tensions also remain a key factor. Renewed tariff threats on EU goods and expanded sanctions on Russia’s energy sector continue to fuel demand for safe-haven assets. Ongoing negotiations with Japan and Indonesia further add to the uncertainty that traditionally supports metals like silver.
Market Forecast: Fundamentals Remain Supportive Into Late Q3
Looking ahead, silver’s outlook remains fundamentally strong. Expectations for Federal Reserve rate cuts in September, combined with capped dollar strength and muted inflation pressures, support continued investor interest in the metal. Meanwhile, geopolitical risk premiums remain elevated as global trade policies remain in flux.
Source: Silver (XAG) Forecast: Weekly Reversal Pattern Threatens Silver Rally Near 14-Year Highs
