Silver price forecast: XAG/USD eyes consolidation-breakout as CPI supports renewed upside

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XAG/USD recovers post-CPI data

Highlights

Silver held above $64.47 support after CPI miss and pressure from tech sector.
XAG/USD rebounded toward $66 as geopolitical tensions and dovish CPI underpinned demand.
Upcoming Michigan sentiment data could trigger either a breakout or renewed pullback.

The rebound lifted silver to a fresh intraday high of $66 per ounce, which marks a 0.6% gain from the previous close. Yet, despite this recovery, silver continues to consolidate just beneath its recent all-time high of $66.87. Since midweek, price action has been largely sideways, suggesting indecision as traders evaluate mixed signals from both macro and sector-specific developments.

Silver price dynamics (Dec 2025). Source: Tradingview

Thursday’s U.S. CPI report was a major macro catalyst. Headline inflation cooled to 2.7% year-over-year in November, far below the 3.1% forecast. Core CPI also printed lower than expected at 2.6%. These figures sparked broad rate cut expectations, which traditionally should have supported precious metals. However, silver did not respond positively during that session, casting doubt on the strength of bullish conviction.

Silver braces for directional breakout clues amid Michigan sentiment print

Part of the muted reaction may stem from growing concern around the AI infrastructure sector. Silver has outperformed gold throughout 2025 largely due to its industrial demand from tech-related applications. However, recent developments, including Blue Owl Capital’s decision to withdraw from a $10 billion data center deal involving Oracle and OpenAI, sparked a selloff in tech stocks and may have capped silver’s momentum during an otherwise supportive macro backdrop.

Still, silver’s quick recovery on Friday suggests underlying demand has not fully faded. Geopolitical friction between the United States and Venezuela is also resurfacing and could boost safe-haven appetite for metals. When paired with the dovish CPI signal, these conditions set a base for a potential breakout above the recent ceiling toward $68 per ounce.

The next critical data point is the University of Michigan Consumer Sentiment Index. A reading above the 53.5 forecast could lift the dollar index and drag silver lower in response. But a miss on expectations would reinforce the current bullish tilt. Market participants are likely to watch both sentiment data and price behavior around the $66.87 high for directional clues.

In recent analysis, we discussed how silver consolidated below its $66.87 record high as investors awaited CPI and jobless claims. Waller’s dovish stance had raised rate-cut bets, but silver stalled below $67 as traders awaited key data.

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