Silver Price Outlook: Silver dips as robust US PPI data lifts US Dollar and tempers Fed rate cut bets

Silver (XAG/USD) edged lower on Thursday, snapping a two-day rebound as renewed strength in the US Dollar weighed on precious metals. At the time of writing, the metal is trading near $38.00 during the US session, down approximately 1.30% on the day.

US Dollar firms after hot PPI and solid jobless claims

• Silver came under pressure following stronger-than-expected US economic data that dampened hopes for aggressive Federal Reserve rate cuts. The US Dollar Index (DXY), which had slipped to a more than two-week low earlier this week, rebounded above the key 98.00 level after the release of upbeat inflation and labor market figures.
• The July Producer Price Index (PPI) surged by 0.9% month-over-month — the largest monthly gain since June 2022 — far exceeding the 0.2% consensus. Year-over-year, PPI accelerated to 3.3%, also beating expectations and rising from June’s 2.4%. Core PPI followed suit, reinforcing concerns that inflationary pressures remain persistent.
• On the labor front, Initial Jobless Claims for the week ending August 8 came in at 224,000, below the forecast of 228,000 and the previous week’s 227,000. Continuing Claims also declined to 1.953 million, signaling ongoing strength in the US job market.
• These data points paint a picture of a resilient economy with sticky inflation — complicating the Federal Reserve's rate outlook and supporting the US Dollar, which in turn weighed on silver prices.

Technical analysis: Consolidation narrows, momentum fades

On the 4-hour chart, XAG/USD is consolidating within a defined range between resistance at $38.75 and support at $37.55, after failing to hold above the $38.50 zone during the Asian session. Earlier, the metal peaked at $38.74 — its highest level since July 25 — before encountering strong selling pressure.

Silver is now hovering near key moving average confluence levels, with the 50-period SMA at $38.01 and the 100-period SMA at $37.96 acting as immediate pivot zones. A firm break below this region could lead to a retest of range support at $37.55, and further downside toward $37.00 and the July 31 swing low.

Momentum indicators point to waning bullish pressure. The Relative Strength Index (RSI) has slipped to 45, suggesting a neutral-to-slightly bearish bias. Meanwhile, the MACD histogram is flattening after a recent bullish crossover, hinting at a potential loss of upward momentum.

• Upside levels to watch: A breakout above $38.50 could open the door to further gains toward $39.30–$39.50.

• Downside risk: A sustained move below $37.50 would shift focus to $37.00 support.