FX.co ★ Helsinki | XAG/USD, SILVER

Silver prices advanced nearly 1% on Wednesday, climbing to near $66.40 as the US dollar remained under sustained pressure, offering a reprieve for the white metal even as markets continued to price in a potential Federal Reserve rate hike at next week's policy meeting. The dollar index hovered near Tuesday's two-week low of 98.72, trading slightly lower at around 98.76, as the greenback struggled to regain its footing despite a robust US jobs report that had reinforced expectations for further monetary tightening. That weaker dollar environment has made silver a more attractive proposition for investors, as the metal's inverse correlation with the greenback tends to strengthen when the dollar is on the defensive. According to the CME FedWatch tool, traders are currently pricing in roughly a 60% probability of a rate hike at the September policy meeting, a view that has been bolstered by Friday's stronger-than-expected Nonfarm Payrolls data. However, the market's attention is now shifting to Friday's US Consumer Price Index report for August, which could provide crucial clues about the Fed's policy trajectory. TD Securities expects core inflation to continue its gradual slowdown, forecasting a 2.3% annual rise in core CPI, down 10 basis points from July, while headline inflation is likely to hold steady at 3.4%. However, the bank cautioned that the risks to their forecast are skewed to the upside, given the assumption of larger price declines for several tariff-affected commodity categories. That potential for an upside surprise in inflation data adds an element of uncertainty to the silver market, as any hotter-than-expected reading could reinforce hawkish Fed expectations and weigh on the metal.

Silver is currently trading near $66.10, hovering in a tight cluster of moving averages that spans just a handful of cents, a configuration that often signals a market preparing for a significant move. On the hourly chart, the 50-period moving average sits at $66.00, while the 200-period moving average is positioned at $66.24. Price is currently trading between these two levels, above the 50-period but below the 200-period, a configuration that signals a short-term recovery within a broader consolidation phase. The fact that price has held above the 50-period average suggests some near-term support, but trading below the 200-period average indicates that the broader momentum remains cautious. The 50-period average is now acting as immediate support, while the 200-period average provides overhead resistance just above current levels. Stepping back to the four-hour chart, the 50-period moving average resides at $66.10, while the 200-period moving average rests lower at $63.85. Price is trading at the 50-period average level, indicating that this level is acting as a critical pivot point. Holding above it would suggest that underlying support remains intact, while a break below would signal a potential shift in momentum. The 200-period average at $63.85 provides a more substantial safety net well beneath current levels. Turning to the horizontal levels that operate independently of the moving averages, immediate resistance is spotted at $66.80, marking the session's peak and a level that has repeatedly capped upside attempts. Above that, the next supply band stretches from $67.00 to $67.20, followed by a heavier barrier at $67.50. If buyers manage to push through these levels, the market could advance toward $67.90 and $68.30. On the downside, the first support floor sits at $65.60, a level that has provided a cushion during recent pullbacks. Losing that footing would open the door to $65.30, then $65.00, which aligns with the recent swing low and represents a key support zone. Further down, $64.70 and $64.40 represent deeper demand pockets, with the latter aligning with the four-hour 200-period moving average and offering a more substantial safety net. Looking ahead, if silver can hold above $65.60 and break through the hourly 200-period moving average at $66.24, buyers may push the market toward $66.80 and beyond. However, if selling pressure intensifies and price breaks below $65.60, a deeper pullback toward $65.30 and $65.00 becomes increasingly likely. The broader structure remains cautiously constructive as long as price holds above the four-hour 200-period moving average at $63.85, but near-term direction will depend on whether buyers can defend current support levels and how markets digest the upcoming CPI data.