Silver Price Forecast: XAG/USD corrects from all-time highs to near $62, outlook remains firm
- Silver price retraces to near $62.00 after posting a fresh all-time high around $62.87.
- The Fed sees only one interest rate cut in 2026.
- The US Dollar Index strives to regain ground after refreshing seven-week low near 98.50
Silver Price (XAG/USD) retraces to near $62.00 during the Asian trading session on Thursday after posting a fresh all-time high at $62.87 earlier in the day. The white metal’s rally hits a temporary roadblock, while its outlook remain firm as the Federal Reserve (Fed) keeps the door open for further monetary easing after reducing interest rates by 25 basis points (bps) to 3.50%-3.75% on Wednesday.
In the policy meeting, the Fed stated that extent and timing of additional adjustments to the target range for Federal funds rates will be dependent on incoming data. On the contrary, market participants anticipated that the Fed might announce it is done with reducing interest rates as inflationary pressures have remained well above the 2% target.
However, Fed Chairman Jerome Powell said in his press conference that the bar for further interest rate cuts is very high.
The Fed’s dot plot showed that policymakers collectively see the Federal Fund Rate heading to 3.4% by the end of 2026, suggesting that there will be one interest rate cut next year.
Lower interest rates by the Fed bode well for non-yielding assets, such as Silver.
Meanwhile, the US Dollar (USD) strives to regain ground after sliding vertically, following the Fed’s monetary policy announcement. During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, ticks up to near 98.70 after refreshing seven-week low at open around 98.50.
Silver technical analysis
Silver price trades higher at $62.00 during Thursday's Asian trading hours. The 20-day Exponential Moving Average (EMA) climbs to $56.24, underscoring a firm uptrend with price comfortably above trend support. The 20-day EMA has steepened in recent sessions, reinforcing bullish control.
The 14-day Relative Strength Index (RSI) at 76.52 is elevated, signaling strong momentum near overbought territory.
The bias stays upward while the 20-day EMA rises and continues to underpin pullbacks. RSI remains strong and above the 70 mark, which could prompt a brief consolidation before the next leg higher. A sustained close above the fresh all-time high of $62.87 would keep topside pressure intact and might open the room for further upside towards $65.00, while dips holding above the average would preserve the advance.
(The technical analysis of this story was written with the help of an AI tool)
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
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
