Silver (XAG) Forecast: Short-Term Outlook Hinges on PCE Data and $30.61 Pivot

Silver Prices Edge Higher as Traders Await Key U.S. Data

Silver prices are trading slightly higher on Wednesday, supported by a weaker U.S. dollar and cautious positioning ahead of critical U.S. economic reports, including the Personal Consumption Expenditures (PCE) inflation data. The market remains within key technical ranges, signaling near-term resistance and support levels that traders are monitoring closely.

Key Technical Levels Define Short-Term Trading

Upside resistance includes $31.29, followed by the minor top at $31.54 and the 50-day moving average. A move below $30.61 could open the door for sellers to target $29.68 and potentially the 200-day moving average.

Dollar Weakness and Rate Expectations Bolster Recovery

The U.S. dollar index fell 0.43%, providing a tailwind for silver as it becomes more appealing to holders of other currencies. This comes as traders anticipate key economic data, particularly core PCE inflation figures, which are closely watched by the Federal Reserve.

The PCE data could significantly influence market expectations for interest rate policy. Currently, the odds of a December rate cut have risen to 66.5%, according to CME Group’s FedWatch tool, compared to 55.7% earlier in the week. Lower interest rates tend to support non-yielding assets like silver.

Short-Term Market Forecast

Silver’s near-term direction will likely hinge on today’s economic data, particularly the PCE figures. A hotter-than-expected reading could reduce rate cut expectations, strengthening the dollar and pressuring silver prices. Conversely, a cooler PCE print may reinforce rate cut bets, providing additional support for the metal.

Technically, a sustained move above the pivot at $30.61 could signal further recovery, with $31.54 as a key upside target. Failure to hold this level may invite selling pressure, with $29.68 and $29.04 as downside targets. Traders should monitor the PCE release and other data closely for potential volatility in silver prices.

More Information in our Economic Calendar.