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Silver (XAG) Forecast: Silver Market Eyes $50 as Gold Strength and Fed Bets Align
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Key Points:
- Silver (XAG/USD) surged 6.87% last week to $46.05, marking a 14-year high and its sixth straight weekly gain.
- A breakout above $44.22 has opened the door for a run to $49.81, just below the psychological $50 barrier.
- China's solar push and supply disruptions at Grasberg mine are tightening silver’s physical market outlook.
Silver Breaks Out as Fed Bets Drive Precious Metals Surge — Will $50 Hold?
Silver (XAG/USD) closed out last week at $46.05, up $2.96 or +6.87%, marking its sixth consecutive weekly gain. The metal hit a 14-year high of $46.63 during the week, driven by a clean breakout above multi-year resistance at $44.22.
This rally, underpinned by broad-based accumulation and gold’s continued strength, has shifted the market’s focus toward the next major level at $49.81 — just below the psychologically important $50 handle.
Rate cut expectations, tight physical supply, and growing industrial demand remain the primary drivers behind silver’s bullish momentum.
Fed Cut Expectations Intact — But Data Raises Doubts
Markets still expect further Fed easing, with the CME FedWatch Tool pricing in 88% odds for an October cut. But last week’s economic data injected some uncertainty.
Upward revisions to Q2 GDP, a 20% jump in new home sales, and a decline in jobless claims challenged the case for near-term cuts. Kansas City Fed President Jeffrey Schmid reinforced the hawkish tone, suggesting policy remains only “slightly restrictive.”
Even so, August’s Core PCE rose just 0.21% month-over-month and 2.9% year-over-year — not hot enough to derail the market’s dovish lean. Traders are still betting on at least one more cut before year-end, keeping precious metals supported.
China’s Solar Push, Supply Risks Fuel Physical Demand
Fundamentals outside of monetary policy are also helping to drive silver higher. China’s pledge to cut carbon emissions has renewed focus on solar panel production — a sector heavily reliant on silver.
At the same time, Freeport’s Grasberg mine declaring force majeure has revived supply-side concerns, tightening the outlook at a time when inventories remain thin.
ETF inflows continue to show institutional confidence, while Asian physical demand remains strong. With both structural and speculative buying in play, silver’s support base is broadening.
Weekly Chart Signals Room to Run — But Risk of Cooling Grows
Technically, silver’s breakout above $44.22 has opened a path to $49.81 — with no meaningful resistance until that level. That former ceiling now becomes new support, and the weekly chart shows a strong uptrend intact.
However, the market is now 7 to 10 weeks off its last significant bottom, placing it in the window where a closing price reversal top becomes possible. Such a move wouldn’t break the uptrend but could trigger a 2–3 week pullback. Traders should monitor weekly closes closely, especially if upside momentum begins to stall.
The 52-week moving average sits far below at $34.08, highlighting how extended this move has become.
Silver Weekly Outlook: Still Bullish, But Rally May Pause Before $49.81
Silver’s technical and fundamental backdrop continues to support a move toward $49.81, with strong buying interest across both speculative and industrial channels. But with the metal up nearly 7% on the week and sitting at its highest level since 2011, the risk of consolidation is growing.
As long as silver holds above $44.22, the bullish case remains intact. Traders should prepare for the potential of a cooling-off period in the coming sessions — but any meaningful dip is likely to attract fresh buying interest, especially if Fed rate cut odds hold near current levels.
Looking ahead, Friday’s NFP report may be the key catalyst for silver’s next move. A softer-than-expected print could revive Fed rate cut expectations and pressure the dollar, reinforcing bullish momentum in XAG/USD. On the other hand, a strong jobs number would likely dampen easing hopes, lift yields, and trigger a deeper pullback. Traders should brace for volatility as positioning tightens ahead of the release.
More Information in our Economic Calendar.
About the Author
James Hyerczykauthor
James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.
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