Silver Price Forecast: XAG/USD jumps to near $73.00 on US rate cut hopes, safe-haven demand
- Silver price jumps to near $72.90 in Friday’s Asian session.
- Expectations of more US interest rate cuts and safe-haven flows support the XAG/USD.
- The CME group raised precious metals margins, which might cap Silver’s upside.
Silver price (XAG/USD) attracts some buyers to around $72.90 during the Asian trading hours on Friday. The white metal rose more than 140% in 2025, marking its sharpest jump since 1979. The rally in Silver is underpinned by the prospect of further US Federal Reserve interest rate cuts in 2026 and safe-haven demand amid geopolitical uncertainty.
Expectations of more US interest rate cuts weigh on the US Dollar (USD) and provide some support to the USD-denominated commodity price. Financial markets are currently pricing in two quarter-point Fed rate cuts this year. Lower interest rates could reduce the opportunity cost of holding Silver, supporting the non-yielding precious metal.
Additionally, the price of silver is also supported by purchases by central banks and investors buying so-called "safe haven" assets due to concerns about global tensions and economic uncertainty.
"Gold and silver prices are experiencing a notable rise due to the interplay of several economic, investment, and geopolitical factors," said Rania Gule from trading platform XS.com.
However, the potential upside for the white metal might be limited in the near term due to some profit-taking and portfolio rebalancing. The Chicago Mercantile Exchange (CME) Group, one of the world’s largest trading floors for commodities, stated that margins for gold, silver, platinum and palladium would increase again. The notice means investors will need to put up more cash on their bets to insure against the prospect of a default when they take delivery of the contract.
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
Lallalit Srijandorn
FXStreet
Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.
