Silver Price Forecast: XAG/USD remains above $115.00 due to safe-haven demand
- Silver rises toward its January 26 record high of $117.74 as investors seek defensive assets.
- Precious metal gains as investors react to Trump’s unconcern over the USD’s recent slide.
- The Fed is expected to keep rates unchanged at 3.50%–3.75% after its two-day meeting on Wednesday.
Silver price (XAG/USD) continues its winning streak for the fifth consecutive session, trading around $115.10 per troy ounce during the early European hours on Wednesday. Safe-haven silver rises toward its January 26 record high of $117.74 as investors shifted into defensive assets.
Precious metals, including Silver attract investors following President Donald Trump’s remarks that he is unconcerned about the USD’s recent slide, strengthened expectations that the administration is comfortable with a weaker greenback to boost export competitiveness.
Ongoing policy uncertainty in Washington, including tariff threats and challenges to the Federal Reserve’s (Fed) independence, along with the “Sell America” narrative, continues to dominate sentiment, further supporting gains in precious metals.
The Federal Reserve is expected to leave rates steady at 3.50%–3.75% after its two-day meeting on Wednesday, following three straight cuts in 2025. Attention will turn to the post-meeting press conference for signals on the policy path ahead.
Citi Commodities Research global head Maximillian J. Layton said that Silver is poised to extend its outperformance after breaking above $100.00 per troy ounce. Layton said bullish drivers, including elevated geopolitical risks and renewed concerns over Federal Reserve independence, are likely to persist in the near term. Citi has raised its three-month Silver price forecast to $150.00 from $100.00 previously, per Dow Jones Newswires.
In China, a pure-play Silver fund halted trading after a surge in demand drove its premium far above the value of its underlying assets. Silver has attracted strong retail interest as prices continue to rally, prompting manufacturers to shift production from jewelry toward one-kilogram Silver bars.
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
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.
