Silver Price Forecast: XAG/USD struggles near two-month lows ahead of US CPI

Silver (XAG/USD) trades on the back foot on Tuesday, losing more than 1.5% as hawkish Federal Reserve (Fed) expectations and elevated US Treasury yields weigh on the non-yielding metal. However, a softer US Dollar (USD) helps contain losses ahead of Wednesday’s US Consumer Price Index (CPI) report. At the time of writing, XAG/USD trades around $59.25, near two-month lows.

The US Dollar Index (DXY), which tracks the Greenback against six major currencies, trades around 102.25, below Monday’s peak of 102.61, its highest since April 2025. A hotter-than-expected inflation reading could lift the US Dollar and Treasury yields and revive expectations of a rate hike at the Fed’s October 27-28 meeting, adding pressure on Silver.

Traders currently price in an 80% probability that rates will remain unchanged this month, according to the CME FedWatch Tool. In contrast, softer inflation could strengthen the case for a pause and offer the metal some relief, although elevated Oil prices keep inflation risks tilted to the upside and expectations of further Fed tightening alive. Higher borrowing costs increase the opportunity cost of holding non-yielding assets such as Silver.

Technical analysis

On the daily chart, XAG/USD remains under the Bollinger Bands Simple Moving Average (SMA) midline at $62.29, keeping the near-term tone bearish. Momentum backs this softer bias, with the Relative Strength Index (RSI) drifting toward the mid-30s and the Moving Average Convergence Divergence (MACD) histogram still negative, while the Average Directional Index near 19 suggests the downtrend is present but not strongly directional.

On the downside, immediate support sits at the Bollinger lower band near $57.42, ahead of the horizontal level at $55.50 and a deeper floor at $50.00. On the topside, initial resistance emerges at the Bollinger SMA midline around $62.29, followed by the upper band near $67.16, with more significant barriers at $70.00 and $75.00 that would need to be reclaimed to ease the current bearish pressure.