Silver Price Forecast: XAG/USD tumbles below $39.00 ahead of US PCE inflation data
The Silver price (XAG/USD) slumps to near $38.80 during the early European trading hours on Friday. The white metal edges lower amid some profit-taking and a stronger US Dollar (USD). Traders brace for the US Personal Consumption Expenditures (PCE) Price Index report for July later on Friday for fresh impetus.
The second estimate for US Gross Domestic Product (GDP) in the second quarter (Q2) of 2025 showed an annualized growth rate of 3.3%, a stronger figure than initially estimated, according to the US Bureau of Economic Analysis (BEA). The upbeat US GDP report diminishes the immediate pressure on the Federal Reserve (Fed) to cut interest rates to stimulate growth, supporting the USD and weighing on the USD-denominated commodity price.
Nonetheless, soft jobs data still has many traders anticipating a rate reduction at the Fed's upcoming September meeting. This, in turn, might cap the downside for the Silver price. New York Fed President John Williams said on Wednesday that it is likely interest rates can fall at some point, but policymakers will need to see the upcoming data to decide if it is appropriate to make a cut next month. Lower interest rates could reduce the opportunity cost of holding Silver, supporting the non-yielding white metal.
Source: FXstreet
