Silver (XAG) Forecast: Can Silver Rally Catch Gold as Fed Cut Bets Grow?

Silver Lags Gold Rally but Breakout Above $41.47 Could Open the Door to $44.22

Silver prices are climbing again this week, supported by broad-based bullish sentiment in the precious metals sector, though the white metal continues to underperform gold, which just posted a fresh all-time high. While gold surged past $3,620 on strong Fed rate cut bets, silver remains anchored just below its own technical breakout level at $41.47—a 14-year high reached last week.

A move through this resistance level could spark a fresh leg higher, with upside potential toward $44.22 in the near term. However, until that level is breached with conviction, silver may continue to consolidate within its current range.

At 13:24 GMT, XAG/USD is trading $41.35, up $0.36 or +0.87%.

Federal Reserve Rate Cut Bets Drive Broader Metals Strength

The Fed remains the dominant catalyst across metals markets. After August’s nonfarm payrolls report showed a sharp slowdown in job creation and a rise in unemployment to 4.3%, traders are pricing in an 88% chance of a 25-basis-point rate cut at the upcoming FOMC meeting. This shift in expectations has driven U.S. Treasury yields to multi-month lows, further boosting investor appetite for non-yielding assets like silver.

The market is also watching Tuesday’s release of the Quarterly Census of Employment and Wages (QCEW), which may revise previous labor data down by as much as 1 million jobs. If confirmed, the QCEW could validate concerns that the labor market has been materially weaker than previously reported, reinforcing the case for more aggressive policy easing.

Support Levels Hold as Bulls Remain in Control

On the technical front, the uptrend remains intact. Silver is well above its 50-day moving average at $38.30, and support levels are clearly defined. Minor support sits at $40.40, with a secondary floor at $39.78. These levels have so far contained any pullback attempts, giving bulls confidence in holding long positions.

Gold’s explosive rally, supported by central bank buying and dollar weakness, may continue to spill over into silver. However, the latter needs fresh momentum to catch up.

Silver Outlook: Breakout Watch at $41.47

Traders should monitor $41.47 closely. A confirmed breakout above this resistance could open the path to $44.22, while failure to hold above $40.40 could trigger short-term profit-taking. With the Fed poised to turn more dovish and inflation data on deck, silver remains in a bullish posture—just awaiting a catalyst to match gold’s pace.

Silver prices forecast: bullish with breakout potential. Watch $41.47 for confirmation.

More Information in our Economic Calendar.