Silver Price Forecast: XAG/USD Hits New Two-Month High, All Eyes on Jackson Hole

Spot silver extended its rally on Friday, trading near $71.32 after earlier refreshing a two-month high. Market attention was entirely focused on the Federal Reserve Chair's speech at the Jackson Hole global central bank symposium later in the day, as investors sought clues on the future monetary policy path.

**Weak Dollar and Policy Expectations as Key Drivers**

The recent strength across the precious metals complex is underpinned by a soft dollar and cooling expectations for Fed rate hikes. Spot silver has gained over 6% this week, while spot gold briefly surpassed the $4,600 mark. Market reports indicate growing concerns over the U.S. fiscal outlook, further driving capital flows into hard assets. Analysts suggest that if the Fed Chair hints at the tightening cycle nearing its end or expresses more concern over a weakening labor market in the speech, it could open new upside for silver.

**Jackson Hole as a Key Near-Term Directional Variable**

The Jackson Hole symposium has historically served as a critical window for the Fed to signal major policy shifts. Current market sentiment is divided over the trade-off between sticky inflation and economic slowdown, and any dovish or hawkish wording could trigger sharp volatility in precious metals. Some institutional views suggest that if the speech reinforces the need for sustained tightening, it could pressure silver in the near term; conversely, signals of a pause or pivot in rate hikes could ignite a fresh wave of upside momentum.

**Technical Picture and Sentiment Lean Positive**

On the chart, silver has attracted more trend-following buying after breaking above the $70 round level. The broader strength in global commodity markets—with copper near record highs and agricultural prices at multi-year peaks—provides additional sentiment support for hard assets like silver. However, ahead of the key risk event, some short-term funds may opt to lock in profits, potentially amplifying intraday volatility.