Silver (XAG) Forecast: Will PPI Data Spark a Silver Rally or Trigger a Pullback?

Silver is trading flat, hovering near key resistance at $33.39. A breakout above this level could drive an acceleration toward the next target zone of $34.87 to $35.40. On the downside, immediate support lies at $32.53, followed by stronger levels at $31.81 and the 50-day moving average at $31.49​.

The market remains cautious ahead of the U.S. Producer Price Index (PPI) report, which could significantly impact inflation expectations and Federal Reserve policy decisions. A softer reading would reinforce recent cooling trends in consumer prices and strengthen the case for interest rate cuts. However, a hotter-than-expected PPI report could challenge the outlook for monetary easing, potentially weighing on silver prices​.

Gold prices are higher and remain within striking distance of their all-time high, supported by expectations of Federal Reserve rate cuts and rising global trade tensions​. A bullish structure remains intact, with key support levels preventing significant downside pressure.

Macquarie has raised its gold price forecast to $3,150 for the third quarter, with a possible peak of $3,500 later this year. Given silver’s dual role as an investment asset and industrial commodity, its price often follows gold’s direction, particularly in periods of monetary policy uncertainty​.

Tariff Uncertainty Could Drive Volatility

Trade policy developments remain a key wildcard for silver prices. President Donald Trump has reaffirmed plans for additional tariffs on China, Canada, and the EU, increasing concerns over higher import costs and potential retaliatory actions. If tariffs escalate, inflation could pick up again, potentially delaying Fed rate cuts and strengthening the U.S. dollar​.

Higher tariffs could also impact industrial demand for silver, particularly in sectors like electronics and solar energy, where silver plays a critical role. Traders will be closely watching how trade developments influence inflation trends and Fed policy projections in the coming weeks.

Market Outlook: Silver Awaits Key Catalysts

Silver remains in a consolidation phase, with a breakout above $33.39 needed to confirm a new leg higher. The outcome of the PPI report will be crucial—softer inflation data could support silver by reinforcing rate-cut expectations, while stronger inflation could pressure prices in the short term. Additionally, trade tensions remain a key risk factor that could inject volatility into silver’s outlook.