Silver (XAG/USD) traded 0.6% lower at around $38.80 during the European trading session on Friday (August 29th). The white metal corrected slightly after failing to extend its gains above $39.00, as investors await the US Personal Consumption Expenditures (PCE) Price Index data for July, due to be released at 12:30 GMT.

Economists expect US core PCE inflation, the Federal Reserve's preferred inflation measure, to rise at a faster pace of 2.9% year-on-year compared to 2.8% in June, with the monthly figure remaining stable at 0.3%.

Technically, signs of accelerating price pressures have forced traders to reduce bets in favor of a Federal Reserve interest rate cut. However, the impact is expected to be limited as Fed officials have recently been more concerned about deteriorating labor market conditions than rising inflation.

Lower interest rates by the Fed bode well for non-yielding assets, such as silver.

On Thursday, Fed Governor Christopher Waller stated that he would support a 25 basis point (bps) rate cut in September as the risk of a labor market downturn has increased.

Ahead of the US PCE inflation data, the US Dollar (USD) traded largely stable. The US Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, traded quietly around 98.00. (alg)

Source: FXstreet