Silver Price Forecast: XAG/USD rebounds above $76.50 after sharp drop, eyes on US CPI data

• Silver price rebounds to around $76.60 in Friday’s Asian session.

• The risk-off tone in equities is starting to widen, with Silver plunging sharply on what looks like algo selling.

• Traders brace for the US CPI inflation data later on Friday for fresh impetus. 

Silver price (XAG/USD) recovers some lost ground to near $76.60 during the Asian trading hours on Friday. The white metal suddenly fell late Thursday, pushing silver down more than 11%. Analysts blame a sudden sell-off amid falling technology stocks and expectations that the Federal Reserve (Fed) will cut interest rates soon. 

Concerns about Artificial Intelligence (AI) spurred a sell-off across financial markets, with margin calls also likely adding to a fall in precious metals. Additionally, expectations that the US central bank would not cut interest rates in the near future following robust jobs data might weigh on a non-yielding asset such as Silver. 

Financial markets are now pricing in nearly a 92% probability that the Fed will hold rates steady at its next meeting, although the odds of a rate cut at its June meeting are now at nearly 50%, according to the CME FedWatch tool.

The Silver Institute industry association said on Tuesday that global silver demand is expected to remain steady in 2026, with gains in retail investment offsetting most of the losses across industrial, jewelry, and silverware demand. 

The US Consumer Price Index (CPI) inflation report will be the highlight later on Friday. This report could offer more clues about the interest rate path. The headline and core CPI are expected to show a rise of 2.5% YoY in January. In case of a softer-than-expected outcome, this could drag the US Dollar (USD) lower and lift the USD-denominated commodity price in the near term.