Silver (XAG) Forecast: Bullish Silver Outlook Builds as Fed Cut Bets Surge Past 90%

Silver Closes at 14-Year High as Fed Bets and Dollar Drop Fuel Breakout Setup

Silver (XAG/USD) rallied 3.27% last week to settle at $40.99, marking its highest weekly close since 2011 and extending a five-week winning streak. Fueled by surging rate cut expectations, falling Treasury yields, and a weaker U.S. dollar, the metal remains on track to retest the key resistance zone near $44.22. The strong weekly finish confirms that buyers remain in control despite emerging industrial demand concerns tied to slowing U.S. growth.

Fed Rate Cut Odds Strengthen Following Disappointing Jobs Data

Weaker-than-expected U.S. labor market data further cemented expectations for a Federal Reserve rate cut at the September 17 FOMC meeting. August non-farm payrollsAugust non-farm payrolls added just 22,000 jobs—well below the 75,000 consensus. The unemployment rate rose to 4.3%, and ADP private payrolls also disappointed earlier in the week. As a result, futures markets now price in a 90% probability of a 25-basis-point cut, with a 10% chance of a 50-point move.

In response, the U.S. dollar index fell to 97.77, while Treasury yields dropped across the curve. The 10-year yield hit 4.088%, its lowest since April, and the 2-year yield slid to 3.511%—a five-month low. These developments provided strong macro support for silver, reinforcing its appeal as a non-yielding store of value.

Industrial Demand Headwinds Temper Sentiment

Despite the monetary tailwinds, silver’s industrial role is presenting a challenge. Stagflation concerns are gaining traction as slower hiring and persistent tariff uncertainty weigh on business investment. Analysts note that weakening demand in electronics, solar, and automotive sectors could curb silver consumption, which may explain why silver underperformed gold despite the favorable rate environment.

This tension between monetary support and industrial risk continues to anchor silver below breakout levels, leaving the market in a consolidation phase just under long-term resistance.

Weekly Technical Structure: Bulls in Control, Eyes on $44.22

Silver’s weekly chart confirms bullish control with a clean close at $40.99, well above stair-step support at $39.96. Below that, deeper support sits at $36.31 and $35.28, protecting the broader uptrend. The next key test lies at $44.22, a multi-month high that represents major resistance. Weekly momentum remains strong, and no significant technical damage occurred during last week’s consolidation.

Short-Term Forecast: Bullish Toward $44.22 While $39.96 Holds

The weekly outlook remains bullish as long as silver holds above $39.96. The macro backdrop—defined by falling real yields, a softening dollar, and a dovish Fed outlook—favors further upside. A confirmed push above $41.47 would likely trigger a retest of $44.22. However, industrial demand uncertainty may continue to limit momentum near resistance. If $39.96 breaks, downside potential opens toward $36.31.

Traders should stay positioned long but reduce size near $44.22 and monitor economic data for signs of weakening demand that could stall the uptrend.

More Information in our Economic Calendar.