Silver Price Forecast: XAG/USD edges lower to near $32.50 as US Dollar stages a recovery

Silver prices face downward pressure as the US Dollar strengthens, buoyed by a rebound in the 2-year US Treasury yield.
Silver may find support from persistent safe-haven demand driven by growing economic uncertainty.
White House economic advisor Kevin Hassett confirmed that President Trump is exploring legal options to remove Fed Chair Jerome Powell.

Akhtar Faruqui FXStreet

Silver price (XAG/USD) dips slightly during Tuesday’s Asian session, trading around $32.60 per troy ounce, after posting gains in the previous session. The grey metal is under pressure as the US Dollar (USD) regains strength. The US Dollar Index (DXY), which measures the Greenback against six major currencies, hovers near 98.30, supported by a rebound in the 2-year US Treasury yield, now at 3.77%.

However, Silver could regain momentum as safe-haven demand persists amid ongoing economic uncertainty. The DXY recently fell to a three-year low after US President Donald Trump intensified pressure on the Federal Reserve (Fed), urging aggressive rate cuts and reportedly exploring the dismissal of Fed Chair Jerome Powell.

White House economic advisor Kevin Hassett confirmed that Trump is looking into the legal grounds for removing Powell. In a Truth Social post, Trump also warned that the economy could falter unless the Fed acts quickly to lower rates.

This rising political uncertainty has boosted demand for safe-haven assets like Silver. Investor sentiment is also shaken by the continued stalemate in global trade talks, with China pushing back against Trump’s tariff tactics. Additionally, Trump’s proposed probe into critical mineral imports has stoked fears of slower growth and higher inflation, factors that may continue to support Silver prices.

Silver FAQs

Why do people invest in Silver?

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.

Which factors influence Silver prices?

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.

How does industrial demand affect Silver 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.

How do Silver prices react to Gold’s moves?

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.

BRANDED CONTENT

Choosing a broker that aligns with your trading needs can significantly impact performance. Our list of the best regulated brokers highlights the best options for seamless and cost-effective trading.

Author

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD eases below 1.1700 after EU inflation data

EUR/USD has come under mild selling pressure below 1.1700 in European trading hours on Wednesday. The pair faces headwinds from softer Eurozone inflation data, which weigh on the Euro. Meanwhile, the US Dollar struggles ahead of US jobs report.

GBP/USD hovers around 1.3500 ahead of US data

GBP/USD loses ground to gyrate around 1.3500 on Wednesday after registering modest gains in the previous session. The pair treads water as the US Dollar struggles ahead of the US ADP Employment Change, JOLTS Job Openings and ISM Services Purchasing Managers’ Index due later in the day.

Gold remains depressed below $4,500 as key US macro data looms

Gold trims a part of its intraday losses, though it retains its negative bias through the first half of the European session on Wednesday and remains well below the $4,500 psychological mark. As investors digest the recent US attack on Venezuela, the underlying bullish sentiment turns out to be a key factor that prompted some profit-taking around the precious metal.

ADP Employment Report set to show moderate rebound in December after November’s drop

The Automatic Data Processing Research Institute will release its monthly Employment Change Report for December on Wednesday. The ADP report is expected to show that the United States economy created 45,000 jobs in the last month of 2025, to offset the 32.000 net employment loss seen in November.

Implications of US intervention in Venezuela

Events in Venezuela are top of mind for market participants, and while developments are associated with an elevated degree of uncertainty, we are not making any changes to our markets or economic forecasts as a result of the deposition of Nicolás Maduro.

Aave Price Forecast: AAVE eyes bullish breakout as on-chain and derivatives data turns supportive

Aave (AAVE) price hovers around $172 on Wednesday, nearing the upper trendline of the falling parallel channel pattern. A break above this technical pattern favors the bulls.