Silver price (XAG/USD) declined by 1.6% to approximately $67.87 during the Asian trading session on Tuesday, as investors exercised caution ahead of the United States Personal Consumer Expenditure Price Index (PCE) data for July, scheduled for release on Wednesday [1]. The PCE report is closely watched because the core PCE inflation is the Federal Reserve’s preferred gauge for assessing inflation trends and monetary policy direction [1].
Analysts at TD Securities expect July’s core PCE inflation to remain within the Fed's 'strike zone' for a second consecutive month, projecting a 0.24% month-over-month increase. Headline prices are anticipated to rise by a more subdued 0.15%, while market-based core PCE is forecast to stay contained at 0.13% m/m [1]. The FX Economic Calendar estimates annualized core PCE inflation at a steady 3.4% [1]. TD Securities also notes weak retail sales data, indicating consumer spending slowed to 0.2% m/m in July and just 0.1% in real terms. Looking ahead, they expect gradual disinflation to resume in 2027 [1].
Higher inflationary pressures have raised concerns about potential interest rate hikes by the Federal Reserve, which typically weigh on non-yielding assets such as silver [1]. The market’s focus this week will be on Fed Chair Kevin Warsh’s comments at the Jackson Hole Symposium on Thursday. While Warsh is known for avoiding explicit forward guidance, he is expected to warn of upside inflation risks [1].
From a technical perspective, XAG/USD is trading above the 20-day exponential moving average (EMA) at $64.64, maintaining a bullish near-term tone. The Relative Strength Index (RSI) is at 61.7, indicating constructive upside momentum despite recent consolidation. Immediate support is at $64.64, with resistance at the August 21 high near $70, and further upside targets at $71.33 and $77.00 [1].
CONCLUSION
Silver prices are under pressure as investors await key US inflation data, with expectations of contained core PCE inflation and slowing consumer spending. The outcome of the PCE report and Fed Chair Warsh’s comments at Jackson Hole will be pivotal for silver’s near-term direction, especially given concerns about potential rate hikes. Technical indicators suggest silver retains bullish momentum above key support levels.