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Silver (XAG) Forecast: Silver Rally Builds Above 50-Day As Fed Cut Bets Strengthen

By:
James Hyerczyk
Published: Aug 31, 2025, 04:06 GMT+00:00

Key Points:

  • Silver rally breaks a 14-year high at $39.53, eyeing $39.97 next and a potential run to $44.00 with no major resistance.
  • The 50-day moving average at $37.70 controls silver’s trend, creating upside momentum and guiding traders’ outlook.
  • Gold’s breakout above $3450 adds fuel to silver’s rally, as Fed rate cut bets rise and the U.S. Dollar weakens further.
Silver Prices Forecast

Silver Hits Multi-Year High—What’s Driving the Move?

Daily Silver (XAG/USD)

Silver (XAG/USD) surged on Friday, gaining 1.64% to close at $39.69, breaking decisively above the 14-year high of $39.53. The strong finish capped an 8.11% gain for August and a 2.13% weekly rise. With the $39.97 level now in focus, the breakout points toward a longer-term target near $44.00, where no significant resistance appears on the chart.

Support remains firm. The 50-day moving average at $37.70 provided the base for the recent rally. Additional price-based support levels on pullbacks include $38.09, $36.96, and $36.21. As long as silver holds above the 50-day moving average, bullish momentum remains intact.

Fed Rate Cut Bets Surge After PCE Data

Daily Gold (XAU/USD)

Gold’s breakout above $3450 is reinforcing silver’s strength, as traders increasingly price in a Fed rate cut. July’s U.S. PCE data met expectations, but the core reading ticked up to 2.9%, keeping inflation concerns alive. Still, the probability of a 25-basis-point cut at the September Fed meeting jumped to 89%, up from 63% at the start of the month.

Daily US Dollar Index (DXY)

The U.S. Dollar Index (DXY) lost 2.19% in August, settling at 97.855 on Friday. With the DXY now trading below its 50-day moving average near 98.000, the weaker dollar continues to support both gold and silver.

ETF Inflows and Political Risk Add to Bullish Case

ETF demand is also driving the precious metals rally. Gold ETFs saw nearly 15 tons of inflows over two sessions, signaling strong institutional positioning. While silver ETF flows weren’t specified, its correlation with gold suggests similar appetite is building in XAG/USD.

In the background, political headlines are adding uncertainty. Legal action by President Trump targeting Fed Governor Lisa Cook is raising concerns over central bank independence. While not yet a market driver, it adds to the risk profile that supports non-yielding assets like silver.

Silver Outlook: All Eyes on $39.97 and $44.00

Silver remains in breakout mode, supported by dovish Fed expectations, a weak dollar, and bullish chart structure. A close above $39.97 would confirm the breakout and clear the path toward $44.00.

Support is clearly defined at $38.09 and $36.96, with the 50-day moving average at $37.70 as a key pivot. As long as silver stays above that moving average, traders can treat dips as buying opportunities. The broader trend remains bullish, especially with gold continuing to lead the metals higher.

More Information in our Economic Calendar.

About the Author

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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