Silver breaks above $60 for the first time; technicals point to further upside
- Silver notches fresh all-time highs above $60, extending its historic year-to-date rally of more than 100%.
- The Fed's interest rate decision is in focus, with markets pricing a 25 basis point cut on Wednesday.
- Technical setup remains firmly bullish, with XAG/USD trading well above key moving averages and momentum strengthening.
Silver (XAG/USD) extends its historic run on Tuesday, surging past the $60 mark for the first time as bullish momentum accelerates ahead of the Federal Reserve’s (Fed) interest rate decision. The metal is up more than 100% year-to-date, supported by a dovish shift in Fed rate expectations, tightening physical supply conditions, and strong demand from both industrial users and investors.
At the time of writing, XAG/USD is trading around $60.43, pushing into uncharted territory. The latest advance comes as traders continue to price in a 25 basis point (bps) Fed rate cut on Wednesday, although some caution lingers that the Fed may signal a slower path of easing into 2026.
At the same time, persistent geopolitical tensions are adding further support to the rally, keeping safe-haven flows steady. Silver’s dual role as both an industrial and defensive asset has helped it outperform Gold this year, with the yellow metal up nearly 60% year-to-date.
From a technical standpoint, the daily chart shows XAG/USD trading comfortably above its short and long-term moving averages, with the 21-day, 50-day and 100-day Simple Moving Averages (SMAs) all sloping firmly higher, underscoring a well-established bullish trend.
The latest breakout above the recent consolidation phase signals that buyers remain firmly in control and sets the stage for a potential extension of the rally toward $61 and beyond.
On the downside, any pullback is likely to attract dip-buying interest, with $59 acting as immediate support, followed by $57. A stronger support zone rests around $54-55, where the 50-day SMA comes into play in the event of a deeper correction.
Momentum signals also back the bullish outlook. The Relative Strength Index (RSI) is holding above 70, showing strong buying pressure with no clear signs of fatigue yet. At the same time, the Average Directional Index (ADX) is turning higher, confirming that the uptrend is strengthening rather than slowing.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Author
Vishal Chaturvedi
FXStreet
I am a macro-focused research analyst with over four years of experience covering forex and commodities market. I enjoy breaking down complex economic trends and turning them into clear, actionable insights that help traders stay ahead of the curve.
