Silver (XAG) Forecast: Fed Silence and Trade Uncertainty Stall Silver Rally

Silver Holds Firm as Trade and Fed Uncertainty Dominate Market Tone

Silver prices closed the week near $33.00, holding steady, but lower, as traders weighed mixed inflation data, ongoing tariff uncertainty, and limited guidance from the Federal Reserve. The precious metal remains supported by broader concerns around U.S. fiscal conditions and global industrial demand, but the absence of a clear catalyst left the market in a state of pause.

Last week, Silver (XAG/USD) settled at $32.99, down $0.50 or -1.49%.

Tariff Policy Reversal Boosts Industrial Demand Outlook

A major development this week was a U.S. trade court ruling that blocked former President Trump’s planned tariffs under emergency authority. While initially triggering a defensive bid in the dollar, the legal setback shifted sentiment toward reduced trade risk.

For silver — with over half of its global demand linked to industrial uses such as photovoltaics and electronics — the prospect of sustained tariff relief bolsters expectations for stronger overseas demand. However, the appeals process has added a layer of unpredictability, keeping risk appetite in check.

Fed Patience, Soft Inflation Reinforce Market Hesitation

April’s PCE inflation data, the Federal Reserve’s preferred measure, came in slightly below expectations. Headline inflation rose 0.1% month-over-month, with the annual rate at 2.1%. Core PCE also moderated to 2.5%. Despite this, Fed officials maintained their cautious stance, offering no new policy direction. Elevated Treasury yields continued to weigh on interest-sensitive assets, limiting investor enthusiasm for silver despite easing inflation pressures.

Consumer Data Signals Slower Momentum, But Rising Savings

April’s consumer spending slowed to 0.2%, down from 0.7% in March, while personal income rose 0.8%, lifting the savings rate to its highest in nearly a year at 4.9%. These figures suggest households are more cautious with discretionary spending, which could temper near-term industrial demand for silver even as longer-term fundamentals remain constructive.

Next Week: All Eyes on U.S. Jobs Data and Fed Speakers

Traders are now preparing for next week’s slate of key data, including the ISM Manufacturing Index and Friday’s U.S. Nonfarm Payrolls report. Labor market strength will be closely watched for signs of inflation pressure and potential Fed policy recalibration. Several Fed officials are also scheduled to speak, and any shift in tone could influence expectations for rate cuts later this year.

Silver Outlook: Waiting for a Catalyst, But Supported Fundamentally

Silver remains fundamentally supported by softening inflation, improving trade conditions, and ongoing fiscal concerns. However, without a clear monetary policy signal or decisive macro trigger, the market is likely to remain rangebound. Next week’s economic releases and Fed commentary could provide the direction traders have been waiting for. Until then, expect cautious positioning with an upside bias.

Technically, the uptrend remains intact with silver holdng well-above the 52-week moving average at $31.03. The current consolidation suggests trader are waiting for a bullish catalyst. Friday’s close has placed the market in a position to test a pair of tops at $34.59 to $34.897.

Essentially, we’re looking at 50-day moving average support and swing top resistance until there is a major news event to fuel a breakout of the range.

More Information in our Economic Calendar.