Silver (XAG) Forecast: Bullish Silver News Points to More Gains—If Powell Doesn’t Cool It

Silver Surges as Fed Decision and Supply Tightness Dominate Market Focus

Spot silver extended its record-setting run on Wednesday, punching through $60 and reaching an all-time intraday high of $61.62 as industrial demand, shrinking inventories, and its U.S. critical-mineral designation continue to pull buyers into an already thin market. The metal is up 112% year-to-date, dwarfing gold’s more measured performance and drawing heavy speculative participation.

At 13:27 GMT, XAUUSD is trading $61.17, up $0.50 or +0.83%.

The broader environment is also in motion ahead of the Federal Reserve’s rate decision, where traders anticipate a “hawkish cut” — a 25-basis-point move paired with restrictive forward guidance.

Markets place an 87–88% probability on the reduction, but the key variable is Chair Jerome Powell’s message and the 2026 dot plot, which will shape sentiment across precious metals.

Is Silver’s Break Above $60 Sustainable?

Analysts identify the $60 mark as a make-or-break zone, a level described as psychologically important for short-term traders and trend followers. Trade Nation’s David Morrison notes the possibility that the level becomes support if momentum continues, though he warns that silver is entering very overbought territory — a backdrop that often precedes sharp reversals in the precious-metals space.

Still, strategists argue that the rally is not simply speculative froth. Max Baecker of American Hartford Gold calls the surge a long-overdue repricing driven by years of supply deficits and aggressive industrial growth. Once silver pierced the 2011 high at $49.82, pent-up demand flooded the market, tightening liquidity and accelerating the move.

Fed Expectations Add Fuel — or Risk — to the Rally

Silver’s strength is amplified by gold’s slower investor flows, especially into physically backed products, leaving silver the preferred play for investors seeking leverage to the Fed’s direction.

Benchmark 10-year Treasury yields have pushed to three-month highs, creating tension between higher real yields and strong commodity sentiment. A restrictive message from Powell could cool enthusiasm temporarily, while a more flexible tone would energize the trade.

Industrial Tightness Remains the Core Driver

Global supply has lagged demand for five straight years, with mined output falling 8.8% from 2016 to 2024 while demand rose 17%. Solar, electric-vehicle, and electronics sectors now consume more than half of annual production. This structural pressure sits at the heart of the 2025 rally and is unlikely to ease soon. ETF inflows have accelerated as the U.S. dollar softens and traders lean into the Fed-cut narrative.

Short-Term Silver Forecast: Bullish but Highly Sensitive to the Fed

The setup remains bullish in the near term as long as industrial demand and supply constraints remain dominant and ETF flows continue to expand. However, silver’s extreme volatility means traders should be prepared for outsized moves following Powell’s comments. A supportive tone could extend gains, while restrictive guidance risks a fast retracement — but the fundamental backdrop still favors buyers.

More Information in our Economic Calendar.