Silver (XAG) Forecast: Bullish Silver Rally Builds as Dollar Flattens and Gold Holds Firm

Silver Breaks Out as Dollar Weakens and Gold Maintains Bullish Tone

Spot silver surged at mid-session Wednesday, fueled by strong technical momentum and a supportive broader backdrop. Prices broke through a key retracement zone between $50.02 and $51.07, which now serves as near-term support. With this barrier cleared, the path is open for a potential test of the multi-year high at $54.49. The move is being reinforced by continued strength in gold and a U.S. dollar that remains pinned near critical support.

At 16:15 GMT, XAGUSD is trading $52.87, up $1.64 or +3.21%.

Bullish Technical Structure in Silver Remains Intact

Silver’s breakout follows a successful defense of its 50-day moving average at $46.97, which has acted as a reliable indicator of trend strength. After holding that level during the recent pullback, buyers stepped back in aggressively. The market has now regained control above key Fibonacci retracement levels and appears to have enough upside momentum to sustain a run at $54.49 over the coming days.

Traders are showing renewed confidence in silver, backed by a broader uptrend in precious metals and fading headwinds from the U.S. dollar. Momentum indicators suggest that bullish interest remains strong, while the technical structure supports a continuation of the rally, provided prices stay above the $50.02 to $51.07 zone.

Gold Holds Firm as Fed Expectations Shift

Gold’s steady performance continues to underpin sentiment in the precious metals space. Spot gold is consolidating above the 50-day moving average at $3914.61, with key resistance sitting at $4192.36. A sustained breakout through that level could drive prices toward the October high at $4381.44.

Traders are reacting to increased odds of a December rate cut following persistent softness in U.S. labor data. According to the CME FedWatch Tool, there is now a 67% probability of a 25-basis-point cut, up from 62% just a day earlier.

These expectations, combined with delayed U.S. economic data due to the government shutdown, are keeping gold bulls in control—and adding fuel to silver’s advance.

Dollar Struggles as Yields Fall and Data Stays Elusive

The U.S. Dollar Index (DXY) is stuck near 99.463, as traders await a final House vote to fund the government through January 30. With Treasury yields easing and data releases like CPI, PPI, and nonfarm payrolls still delayed, dollar bulls are showing hesitation. A decisive move below 99.287 could confirm further weakness, which would continue to benefit metals.

Short-Term Silver Outlook: Bullish Above $51.07

With strong technical footing, support from gold, and a softening dollar, silver remains poised for additional upside. As long as prices hold above the $50.02 to $51.07 breakout zone, the bullish case remains intact, with $54.49 now in focus as the next upside objective.

More Information in our Economic Calendar.