Silver Price Forecast: XAG/USD slips below $64.00 as inflation fears increase

Silver price (XAG/USD) extends its losses for the second successive day, trading around $63.40 per troy ounce during the Asian hours on Wednesday. The non-yielding Silver declines as a global bond selloff drove the US 10-year Treasury yield up to 4.80%, hitting its highest point since early 2025. This surge in yields reignited market anxieties surrounding stubborn inflation and the possibility of further interest rate increases.

Compounding these inflationary concerns, crude oil prices spiked due to intensifying geopolitical friction between the United States and Iran, which threatens energy supplies out of the Middle East. According to TD Securities, the latest flare-up between the US and Iran is reinforcing the sense that the regional backdrop remains highly unstable. Strategists there argue that the renewed tensions “continue to highlight how flimsy any deal or MoU headlines really are,” underscoring the market’s sensitivity to further disruptions and helping to sustain a risk premium across the energy complex.

Meanwhile, recent economic data from the United States offered a mixed picture for investors. July JOLTS job openings fell short of expectations, landing at 7.27 million. At the same time, the ISM Manufacturing PMI dipped to 54.6 in August from 55.6 in the previous month. While the PMI missed estimates, it stayed comfortably in expansion territory, indicating ongoing strength in the manufacturing domain. Market focus is now shifting to the upcoming ADP employment report and Friday's nonfarm payrolls for clearer signals on the Federal Reserve's rate strategy.

Fed’s Barr keeps hawkish bias as inflation risks keep rate hike option alive

Fed’s Barr delivered a slightly more hawkish-than-usual message, with the FXS Speechtracker score at 7/10 versus a 6.8/10 historical average, underscoring concern that inflation “remains too high” despite a stable labor market and “solid” AI-driven growth. The conditional guidance — favoring steady rates only if there is confidence inflation is moderating, but explicitly flagging a potential rate hike if it does not — reinforces an asymmetric reaction function tilted toward tightening. Overall, the tone signals a low tolerance for renewed price pressures and keeps upside risks for the Dollar intact.

The FXS Fed Sentiment Index slipped by 0.42 points to 128.86, indicating a modest pullback in perceived hawkishness even as the index remains firmly above the neutral 100 mark. This configuration suggests that, while the immediate speech tone was only marginally above the established baseline in the FXS Speechtracker, the broader policy backdrop stays clearly hawkish, with the FXS Fed Sentiment Index still signaling a bias that supports the Dollar against lower-yielding currencies.