Silver extends rally as Powell's Jackson Hole remarks boost Fed cut bets

• Silver extends gains for the third consecutive day, trading around $38.70, up 1.2% on Friday.
• Fed Chair Powell's Jackson Hole remarks highlighted rising downside risks to jobs and tariff-driven inflation, reinforcing a cautious but flexible monetary policy stance.
• Markets interpret remarks as dovish; CME FedWatch shows 90% cut probability in September, up from 70% earlier in the day.

Silver (XAG/USD) rallies sharply on Friday, rebounding from an intraday low of $37.70 to trade near $38.70, up around 1.40% on the day. The move came as traders repositioned after Federal Reserve (Fed) Chair Jerome Powell struck a cautious but flexible tone in his Jackson Hole address, leaving the door open to monetary policy easing.

Powell acknowledged that the US economy faces a shifting balance of risks, with downside pressures on employment and upside risks to inflation. He noted that job growth has slowed sharply to just 35,000 per month over the past three months, while GDP growth cooled to 1.2% in the first half of the year. At the same time, higher tariffs are now clearly pushing up consumer prices, with core PCE inflation running at 2.9% in July. Powell stressed that while these effects may prove temporary, the Fed will not allow a one-time rise in prices to turn into an ongoing inflation problem.

Markets interpreted the speech as leaning dovish, with rate cut bets strengthening as Powell emphasized a balanced approach to the Fed's dual mandate. The CME FedWatch Tool now shows a 90% probability of a 25 basis point cut in September, compared with about 70% earlier in the day. The repricing sent the U.S. Dollar broadly lower and boosted demand for precious metals.

Silver extended gains as investors sought a hedge against both slower growth and lingering inflation risks. The metal is holding comfortably above the $38.00 handle, with resistance seen near $38.80-$39.00. A sustained break higher could open the way toward the $39.50-$40.00 zone, while immediate support rests at $37.50.