Silver (XAG) Forecast: Rally Stalls, Bulls Eye $42.80 Pivot Support Before Rebound

Silver Stalls Below $44.50 as Traders Eye Fed Cuts and PCE Data

Spot silver prices edged lower in Wednesday’s session, pausing just under a key resistance zone after hitting a multi-year high of $44.47. The pullback reflects a consolidation phase rather than a reversal, as the market prepares for a series of major economic events, including Friday’s PCE inflation data and potential government shutdown concerns.

At 16:00 GMT, XAG/USD is trading $43.94, down $0.11 or -0.24%.

The short-term range now stretches from $41.14 to $44.47, setting the 50% retracement at $42.80 as the immediate support to monitor. Below that, dip-buying interest remains strong at layered levels near $41.14, $40.73, and $40.40. The 50-day moving average sits at $39.57 and continues to anchor the uptrend.

Fed Signals and Treasury Yields Keep Silver Supported

While gold often takes the spotlight during Fed-related events, silver has been riding its coattails, benefiting both as a high-beta precious metal and a play on structural demand from electrification and photovoltaics. Fed Chair Powell’s recent comments flagged a no-win policy setup, noting inflation risks to the upside and employment risks to the downside.

Following the Fed’s rate cut last week, traders are pricing in two additional quarter-point cuts this year, with a 93% chance for October and 79% for December.

Yields remain sensitive to upcoming data, with the 10-year Treasury yield ticking up to 4.137% and the 30-year at 4.745%, limiting silver’s upside in the short term but failing to derail the broader bullish setup.

Dollar Index Rebound Fails to Dent Precious Metals Appetite

The U.S. Dollar Index rose 0.5% to 97.745 on Wednesday, rebounding from earlier weakness. However, silver’s resilience suggests safe-haven positioning remains intact. Continued geopolitical tension and dovish Fed expectations are offering tailwinds to precious metals despite dollar strength. Even with German business sentiment deteriorating, silver maintained its footing, reflecting broader global uncertainty.

Data-Driven Setup: PCE Inflation in Focus

Traders are now fixated on Friday’s PCE print—the Fed’s preferred inflation gauge—which could reinforce or weaken the case for additional rate cuts. A soft 0.2% MoM reading would likely pressure the dollar and reignite momentum in silver and gold. Additionally, concerns about a potential U.S. government shutdown are keeping investors defensive, with capital rotating into real assets.

Silver Outlook: Bullish Above $41.14, Eyes on $49.81

Silver remains in a bullish technical structure above $41.14, with buyers stepping in on dips. A break above $44.47 would clear the path to the next major upside target at $49.81.

While consolidation is expected ahead of Friday’s inflation data, structural demand, Fed policy shifts, and geopolitical risk continue to support a firm bid. Traders should remain constructive while the $41.14–$42.80 zone holds.

More Information in our Economic Calendar.