Silver (XAG) Forecast: Fed Rate Cut Bets Spark New Silver Rally—Can It Hit $39.53?

Silver Holding Firm as Fed Bets and Tariff Turmoil Drive Safe-Haven Flow

Silver prices are tracking higher, riding the coattails of renewed safe-haven demand sparked by aggressive U.S. trade policy and rising expectations for Federal Reserve rate cuts. While gold remains the headline mover, silver’s correlation to the same macro forces—and its dual industrial-hedge appeal—makes it an essential trade in the current risk-off mood.

At 11:20 GMT, XAG/USD is trading $38.44, up $0.61 or +1.62%.

On Thursday, silver cleared a short-term pivot at $37.87, establishing a new base of support. This breakout follows several failed tests of resistance and signals a fresh push by bulls. A confirmed hold above this level opens the door to challenge the long-term resistance at $39.53, a 14-year high. If $37.87 fails, downside risk targets the 50-day moving average at $36.90, with secondary support at $36.21.

Fed Rate Cut Odds Soar—What That Means for Silver

Markets are now pricing in a 93% chance of a Fed rate cut in September, up sharply from just 48% last week, according to CME FedWatch data. The catalyst: dovish commentary from key Fed figures and signs of economic strain, particularly following President Trump’s announcement of wide-ranging tariffs. These include levies from 10% to 50% on multiple countries and a 100% tariff on semiconductors not produced domestically.

This aggressive trade stance has rattled the U.S. dollar, with the Dollar Index (DXY) falling to a 1½-week low at 98.00. As a non-yielding asset priced in dollars, silver tends to benefit from both falling yields and a weaker greenback—making it attractive to global buyers.

Gold’s Rally Provides a Strong Tailwind for Silver

Gold’s surge to $3,397.58—driven by safe-haven demand and central bank dovishness—adds indirect fuel to silver. While gold holds the 50-day moving average at $3,347.60, silver is benefiting from spillover buying as traders seek relative value. Silver’s industrial side could also find support if lower rates eventually stimulate production, keeping silver demand resilient.

Silver Price Forecast: Eyes on $39.53 with Support at $37.87

As long as silver holds above $37.87, the bias remains to the upside, with momentum favoring a test of $39.53. However, failure to hold this level could send prices down to $36.90, where the 50-day moving average provides the next technical floor.

With the Fed leaning dovish and geopolitical tensions feeding safe-haven appetite, silver remains supported—but the path higher hinges on holding that $37.87 pivot.

Traders should stay alert for any daily close below the 50-day moving average as an early sign of exhaustion. Until then, dips remain buyable within this bullish structure.

More Information in our Economic Calendar.