Silver (XAG) Forecast: All Eyes on Powell—Will Fed Clarity Spark a Turnaround?

Can the Fed Soothe Market Jitters as Silver Struggles?

Silver ended the week under pressure, weighed down by stronger U.S. labor data, firming yields, and renewed uncertainty over Federal Reserve policy. Traders pulled back from earlier bullish expectations after April’s jobs report signaled continued economic resilience, prompting a recalibration of interest rate bets. The dollar gained on the repricing, further reducing demand for silver from international buyers.

Last week. XAG/USD settled at $32.01, down $1.09 or -3.28%.

Technically, the market closed within striking distance of a cluster of major tops, including $34.59, $34.87 and $35.40.

On the downside, the nearest support is the 52-week moving average at $30.82, followed by pivots at $30.44 and $27.78.

The key for the bulls is being able to sustain the rally over the 52-week moving average.

Has the Case for a June Rate Cut Collapsed?

The stronger-than-expected nonfarm payrolls report—showing 177,000 new jobs and steady unemployment at 4.2%—undermined hopes for an imminent shift in monetary policy. Wage growth also surprised on the upside, fueling concerns that inflation may remain sticky.

In response, market odds of a June rate cut dropped sharply. This leaves silver at a disadvantage, as a higher-rate environment makes yieldless assets less attractive and tightens financial conditions across the board.

What Will Powell Say Next?

Markets are now bracing for Wednesday’s Federal Reserve policy statement and Chair Jerome Powell’s press conference. The Fed is expected to hold interest rates steady, but Powell’s remarks will carry weight. Investors will be listening for any shift in tone—particularly whether he downplays inflation risks or acknowledges growing downside pressures.

Political tension adds another layer of intrigue, with President Trump and Treasury Secretary Bessent publicly urging rate cuts. While the Fed is unlikely to react to political pressure, Powell may be pressed to defend the Fed’s independence and its inflation-fighting stance.

Does Industrial Demand Still Offer Support?

Amid macro headwinds, silver continues to draw steady interest from industrial buyers. Demand linked to clean energy—especially solar panel production and electric vehicles—remains strong. Growth in China and India’s renewable sectors has provided some cushion against falling investor interest. While this demand doesn’t spark rallies, it offers underlying support, keeping the metal tied to real-world economic growth even as financial markets shift focus to monetary policy.

Market Forecast: Fed Decision and Messaging Take Center Stage

The week ahead is fundamentally driven. With the Fed poised to hold rates and Powell expected to defend current policy, traders are likely to remain cautious.

The sharp drop in June cut expectations, combined with rising political pressure and upcoming speeches from several Fed officials on Friday, sets the stage for continued uncertainty.

Unless the Fed signals a shift in its outlook—or new data weakens the case for higher rates—silver will likely remain under macro pressure.

Industrial demand may soften the blow, but it won’t be enough to reverse the broader tone without a clear change in policy direction.

More Information in our Economic Calendar.