Silver (XAG) Forecast: Price Prediction Turns Bullish with Gold Leading the Way

Silver Holds Ground as Dollar Softens and Fed Bets Mount

Silver prices edged higher Wednesday, tracking gains in gold as traders increased bets on a September rate cut from the Federal Reserve. Support from a weakening U.S. dollar and falling Treasury yields helped silver reclaim bullish momentum, with technical levels reinforcing the near-term bullish case.

At 12:19 GMT, XAG/USD is trading $38.54, up $0.63 or +1.66%.

Fed Rate Cut Bets Drive Precious Metals Higher

Traders now see a 98% chance the Fed cuts rates in September, according to the CME FedWatch Tool, following softer U.S. inflation data. This dovish pivot, supported by comments from Treasury Secretary Bessent, has sent yields lower across the curve—driving up interest in non-yielding assets like silver.

Gold, often a leading signal for silver, reclaimed its 50-day moving average and pivot level, while silver cleared its own pivot at $37.87 and made a strong push toward the recent swing high of $38.51. Although the rally paused at $38.64, the broader picture still favors buyers, particularly on intraday dips.

Weaker Dollar Fuels Silver Demand

The U.S. Dollar Index dropped to a two-week low at 97.76, making silver more attractive to foreign buyers. With political uncertainty mounting in Washington—especially over rumored legal moves against Fed Chair Powell—confidence in the dollar is wavering. This softening is supporting silver across multiple currency pairs, echoing the same tailwinds lifting gold.

Industrial Support from China Remains a Key Factor

Unlike gold, silver draws significant support from industrial demand, particularly from China. With Chinese stimulus measures still feeding into the manufacturing sector, silver is benefiting from increased optimism around forward demand. Any signs of stabilization or acceleration in Chinese output would likely amplify bullish sentiment.

Technical Levels Confirm Bullish Bias—But Watch $37.20 Closely

Silver remains in a bullish trend so long as the 50-day moving average at $37.20 holds. Even if prices pull back through $37.87 or the prior swing low at $37.51, buyers are likely to re-emerge near that MA level. The immediate upside target remains $39.53—the 14-year high—with $38.64 and $38.51 serving as near-term resistance.

Outlook: Bullish Momentum Intact, Supported by Policy and Technicals

With monetary policy favoring lower rates, bond yields declining, and the dollar weakening, silver’s near-term outlook leans bullish. Continued support from Chinese industrial demand only adds to the tailwind. As long as $37.20 remains intact, traders should view pullbacks as potential buying opportunities targeting a retest of $39.53.

More Information in our Economic Calendar.