Silver Breaks Out as Fed Dovish Pivot Cracks Dollar Support
Silver surged on Friday, extending its upside momentum as Federal Reserve Chair Jerome Powell’s dovish tilt at Jackson Hole triggered heavy selling in the U.S. Dollar and front-end yields.
Spot silver (XAG/USD) ended the session firmly above its 50-day moving average and broke past resistance at $38.74, putting the 14-year high of $39.53 directly in view.
On Friday, XAG/USD settled at $38.15, up $0.25 or +0.66%.
Powell’s Labor Market Warning Sparks Rate Cut Bets
In his final Jackson Hole appearance, Powell noted that rising downside risks in the labor market may warrant a shift in the Fed’s stance. Though he refrained from confirming a September cut, traders saw the door open. Fed fund futures rapidly repriced, with CME’s FedWatch tool showing odds of a 25-basis point September cut soaring to 91%, up from 72% earlier in the day.
This commentary sent Treasury yields tumbling, with the 2-year yield down nearly 10 basis points to 3.698%, and the 10-year to 4.256%. These declines immediately boosted non-yielding assets, pushing both gold and silver sharply higher.
Dollar Index Breakdown Fuels Silver Momentum
The U.S. Dollar Index (DXY) collapsed 0.90% to close at 97.73, slicing through both its 50-day SMA at 98.1 and support at 97.859. Technically, the DXY is now trading below both its 50- and 200-day moving averages, with momentum clearly favoring sellers. Downside targets are set at 97.109 and 96.377.
Silver’s strength was a direct reflection of this breakdown. As the dollar weakens and U.S. real yields compress, silver’s relative appeal is increasing. With bullish macro and technical alignment, the breakout above $38.74 is gaining credibility.
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See all Silver forecastsSupport Holds—Now What?
Technically, support is now well-defined by two closely aligned levels: the 50-day moving average at $37.50 and the 50% retracement at $37.40. This zone marks a critical line in the sand for short-term traders. A solid hold above it would likely continue to attract dip buyers.
There is little in the way of resistance until the multi-year peak at $39.53. However, as with most breakouts, follow-through volume will be critical to sustain the move. For now, silver’s technical posture favors a push higher, supported by broader risk-on sentiment in metals.
Silver Outlook: Bullish Bias Intact with Eyes on $39.53
Unless upcoming jobs or inflation data dramatically reverse the Fed’s dovish lean, silver remains a strong long candidate. A decisive push above $39.53 could open the door toward $40.30.
On the downside, watch $37.50 and $37.40 as must-hold levels. With Fed policy expectations now tilted toward easing and the dollar under pressure, silver has the momentum—and the technical backdrop—to extend higher in the near term.
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