Silver (XAG) Forecast: Breakout Above $39.53 Could Ignite New Bull Leg in Silver Market

Silver Holds Firm Above 50-Day; Eyes $39.53 Breakout and $44 Target

Silver is grinding higher as Thursday’s session shows renewed buying interest following a technical rebound off Wednesday’s low at $38.09. The metal continues to hold above its 50-day moving average at $37.60, keeping bullish positioning intact and reinforcing the broader “buy-the-dip” narrative traders have leaned on through recent pullbacks.

At 12:36 GMT, XAG/USD is trading $38.96, up $0.35 or +0.92%.

Supportive Technicals Signal More Upside Ahead

The key near-term resistance stands at $39.06, last week’s high. A clean break above that level would bring the July 23 peak at $39.53 into play. Price action above that mark could open the door to a fresh leg higher, with bulls setting sights on the $44.00 zone. Importantly, the sustained defense of the 50-day MA signals continued appetite for long exposure as support zones remain respected.

Fed Rate Cut Bets Grow as Powell and Williams Turn Cautious

A dovish tone from Fed officials is helping to underpin precious metals. The CME FedWatch Tool shows markets now assigning an 89% chance of a 25-basis-point cut at the September policy meeting. Fed Chair Jerome Powell highlighted potential labor market weakness as a driver for policy easing, while New York Fed President John Williams emphasized the Fed’s need for more data before making decisions.

The Personal Consumption Expenditures (PCE) Price Index release on Friday is the next major catalyst. The Fed’s preferred inflation gauge is expected to rise 2.6% year-over-year in July. A softer-than-expected print could accelerate bets on policy easing, likely weakening the dollar and driving silver higher.

Political Pressure on the Fed Adds to Dollar Uncertainty

President Trump’s push to oust Fed Governor Lisa Cook and stack the Fed Board with loyalists has raised fresh concerns about the central bank’s independence. Trump’s statement that he’ll “have a majority very shortly” at the Fed Board has unnerved currency markets, contributing to ongoing softness in the dollar. The dollar index is already under pressure, down 0.1%, while short-dated yields continue to slip.

Silver Outlook: Bullish While Above 50-Day Moving Average

The technical and macro backdrop continues to favor silver bulls. As long as prices stay above the 50-day moving average, the bias remains to the upside. A break over $39.06 would be the first trigger, with $39.53 the key barrier to a bullish extension toward $44.00. Dips remain buying opportunities unless the 50-day moving average fails. Traders should stay focused on the PCE data and Fed commentary for the next directional cue.

More Information in our Economic Calendar.