Silver Price Forecast: XAG/USD retreats from 14-year highs to below $45.00

• Silver price faces some selling pressure around $44.80 in Friday’s Asian session.

• A firmer US Dollar undermines the USD-denominated commodity price. 

• Rising geopolitical risks might cap the downside for the Silver price. 

Silver price (XAG/USD) attracts some sellers to near $44.80 after reaching its highest in over 14 years during the Asian trading hours on Friday. Traders await the release of the US August Personal Consumption Expenditures (PCE) Price Index data later on Friday for fresh impetus. 

The precious metal has gained momentum in the previous sessions as markets expected at least two rate cuts from the Federal Reserve (Fed) in the remaining two Fed meetings this year. Lower interest rates could reduce the opportunity cost of holding Silver, supporting the non-yielding precious metal. 

Nonetheless, the cautious tone from Fed officials lifts the US Dollar (USD) and weighs on the USD-denominated commodity price. Fed Chair Jerome Powell said on Tuesday that the policymakers continue to deal with the double whammy of potentially higher inflation and a slowing labor market. Powell added that the interest rates are in a good place to deal with either threat, suggesting he sees no urgency to lower rates aggressively.  

Meanwhile, Fed Governor Stephen Miran preferred a more aggressive 0.50% cut, arguing that with temporary tariff effects aside, inflation was closer to the 2% target. Traders slightly pared back bets for a Fed rate cut by year-end to about 33%, according to LSEG data.  

Ongoing geopolitical tensions in Europe and the Middle East might boost the safe-haven flows, helping limit Silver’s losses in the near term. On Thursday, Ukraine’s President Zelensky warned that Russian President Vladimir Putin "will keep driving the war forward wider and deeper" if he is not stopped. Russian aerial attacks have become larger and more frequent since Moscow scaled up its drone production at the start of the year.  But while most of these assaults used to come at night, there have been more daytime threats in recent weeks.