Silver Price Forecast: XAG/USD gains further to near $52 as US yields remain under pressure
- Silver price rises further to near $52.00 as Fed dovish expectations keep US yields under pressure.
- Fed’s Williams see the need of further monetary policy adjustment.
- White House economic adviser Hassett emerges as frontrunner for next Fed’s chair.
Silver price (XAG/USD) extends its three-day recovery move to near $52.00 during the Asian trading session on Wednesday. The white metal strengthens as yields on interest-bearing assets have remained under pressure due to growing expectations that the Federal Reserve (Fed) could reduce interest rates again this year.
At the time of writing, 10-year United States (US) Treasury yields trade flat around 4.00%, but have come down 3.4% in a week.
Lower yields on interest-bearing assets bode well for non-yielding assets, such as Silver.
According to the CME FedWatch tool, the probability of the Fed to cut interest rates by 25 basis points (bps) to 3.50%-3.75% in the December meeting has increased to 85.3% from 50.1% seen a week ago.
Fed dovish expectations have been prompted by comments from New York President John Williams on Friday, which supported the need of loosening monetary conditions further. “I view monetary policy as being modestly restrictive, although somewhat less so than before our recent actions, adding that there is room for a further adjustment in the near term,” Williams said, CNBC reported.
Meanwhile, headlines from Bloomberg stating that White House Economic Adviser Kevin Hasset has emerged frontrunner replacement for Fed Chair Jerome Powell. The entry of one more US President Donald Trump’s candidate, after Governor Stephen Miran, into the Federal Open Market Committee (FOMC) could increase the odds of a faster monetary expansion cycle, given that Trump has been criticizing the central bank, especially Fed’s Powell, over keeping interest rates higher.
Silver technical analysis
In the daily chart, XAG/USD trades at $51.94. The 20-day exponential moving average rises and price holds above it, reinforcing an upward bias and improving trend quality. RSI at 59.15 stays above the neutral midline, confirming positive momentum without overbought pressure. Initial support aligns with the 20-day EMA at $50.40, suggesting dips could remain contained.
The rising average continues to underpin the move, and sustained closes above it would keep the path of least resistance to the upside. If RSI fades toward 50, momentum would cool and the market could shift into consolidation, with pullbacks expected to stabilize around the moving average.
Looking down, the September 23 high of $44.47 would remain a key support. On the upside, the all-time high of $54.50 might act as key barrier.
(The technical analysis of this story was written with the help of an AI tool)
Silver daily chart
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.
