Silver Price Forecast: XAG/USD refreshes 14-year high near $43.80 on Fed dovish expectations
- Silver price surges to near $43.80 as the Fed signals more interest rate cuts this year.
- The Fed reduced interest rates last week by 25 bps to 4.00%-4.25%.
- Investors await Fed Powell’s speech scheduled on Wednesday.
Silver price (XAG/USD) posts a fresh 14-year high around $43.80 on Monday. The white metal surges almost 1.6% at the start of the week as United States (US) bond yields struggle to extend its upside move amid firm expectations that the Federal Reserve (Fed) will continue reducing interest rates amid slowing job market.
10-year US Treasury Yields struggles to extend its three-day recovery move above 4.15%. Lower yields on interest-bearing assets increase the appeal of non-yielding assets, such as Silver.
On Wednesday, the Fed reduced its key borrowing rates by 25 basis points (bps) to 4.00%-4.25% and signaled more interest rate cuts in the remainder of the year. The Fed’s dot plot showed that policymakers collectively see the Federal Fund rate heading to 3.6% by the year-end.
For more cues on the interest rate outlook, investors await Fed Chair Jerome Powell’s speech at the Greater Providence Chamber of Commerce 2025 Economic Outlook Luncheon on Tuesday. Market participants would like to know how bad the labor demand situation is, as the Fed has signaled further policy easing even as inflation has remained well above the 2% target.
In Monday’s session, a slew of Federal Open Market Committee (FOMC) members, including newly appointed President Donald Trump’s candidate Stephen Miran, are scheduled to speak. Miran was the one FOMC member who voted for a 50-bps interest rate cut in the policy meeting last week.
Silver technical analysis
Silver price jumps to near $43.80 on Monday, the highest level seen in 14 years. Upward-sloping 20-day Exponential Moving Average (EMA) around $41.30 suggests that the near-term trend is bullish.
The 14-day Relative Strength Index (RSI) oscillated inside the 60.00-80.00 range, suggesting a strong bullish momentum.
Looking down, the psychological figure of $40.00 will be a key support for the Silver price. On the upside, the Silver price could extend its upside to near $45.00
Silver daily chart
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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.
