Silver (XAG) Forecast: Breakout Above $44.22 Could Open Door to $49.81 Rally

Silver Tests Multi-Year High as Fed Rate Cut Bets Fuel Precious Metals Rally

Silver surged higher on Monday, trading just below the multi-year resistance at $44.22. Fueled by broad demand for precious metals and the Federal Reserve’s recent rate cut, the metal is now one breakout away from opening a path to $49.81—a level not seen in over a decade.

At 10:30 GMT, XAG/USD is trading $43.75, up $0.66 or +1.52%.

Silver’s advance is also riding gold’s momentum. Spot gold broke above its previous all-time high of $3707.56, confirming a bullish breakout and targeting the next swing level at $3879.64. Traders are increasingly rotating into silver as gold’s upside continues to validate bullish positioning across the entire complex.

Rate Cut Momentum Lifts Bullish Sentiment Across Metals

The Federal Reserve’s 25 basis point cut last week—its first since December—has added fuel to the rally. Markets are now pricing in a 93% chance of another cut in October and 81% odds for a third by year-end, according to CME FedWatch Tool data.

This policy backdrop has triggered renewed buying interest across the board. Precious metals, which benefit from lower real yields, are seeing rising institutional allocations. UBS’s Giovanni Staunovo flagged increasing gold ETF inflows as a sign of broader Western investor participation—a trend that may spill over into silver if momentum continues.

Support Levels in Silver Provide Clear Structure for Bulls

Silver’s trend remains technically intact. The key resistance sits at $44.22, with potential profit-taking on the first test. However, a confirmed breakout above this zone could accelerate the move toward $49.81.

On the downside, initial support comes in at $41.14, followed by $40.73 and $40.40. The longer-term trend remains guided by the 50-day moving average, now rising at $39.31, which continues to support bullish momentum. These levels will be critical for traders managing downside risk.

Will Fed Comments and Inflation Data Be the Next Catalyst?

With gold already in breakout territory and silver pressing against a major ceiling, market focus now turns to Fed Chair Powell’s Tuesday commentary and Friday’s core PCE inflation release. These events could confirm or disrupt current rate cut expectations.

Silver traders should prepare for increased volatility. A dovish tilt from Powell or a downside surprise in PCE could be the spark needed to propel silver above $44.22.

Silver Market Outlook: Bullish With Eyes on Breakout

Silver’s current price action, supported by gold’s breakout and a dovish Fed, keeps the technical bias firmly to the upside. A move above $44.22 would confirm a bullish extension toward $49.81, while downside is well-anchored by support at $41.14 and the rising 50-day. All eyes now turn to the Fed and inflation data as the next market-moving catalysts.

More Information in our Economic Calendar.