Silver (XAG) Forecast: Silver Rally Eyes $40 as Dollar Drops and Fed Pivot Looms

Silver Nears Breakout as Dollar Softens and Gold Strengthens

Silver prices surged Monday, tracking gains in gold as the U.S. dollar weakened and Treasury yields slipped. The rally brings silver within reach of last week’s 14-year high at $39.13, reinforcing its bullish setup just as traders brace for a week loaded with policy risks, economic data, and tariff deadlines.

At 12:05 GMT, XAG/USD is trading $38.55, up $0.38 or +1.00%.

The U.S. Dollar Index fell 0.2%, making metals priced in dollars more attractive globally.

At the same time, U.S. Treasury yields declined, with the 10-year note slipping more than five basis points to 4.374%. This shift toward lower yields is supporting non-yielding assets like silver and gold as traders grow cautious ahead of the Federal Reserve’s upcoming policy decision.

Will Federal Reserve Policy Keep Supporting Precious Metals?

The Fed enters a blackout period this week ahead of next week’s FOMC meeting. That leaves markets leaning on earlier commentary—especially remarks from Fed Governor Christopher Waller, who hinted at openness to rate cuts. While inflation remains sticky and economic growth has held firm, analysts at ANZ see limited scope for aggressive easing, keeping silver’s gains measured but persistent.

Traders continue to embrace a “buy-on-dip” posture across the precious metals space, confident that any Fed dovishness or economic miss could spark renewed upside. Gold, often a leader in directional moves, is testing breakout levels that could spill over to silver should macro conditions remain favorable.

Silver’s Chart Levels Draw Technical Traders’ Eyes

Silver’s technical picture is bullish, with higher tops and higher bottoms still intact. A move above $39.13 would confirm the uptrend and likely draw attention to the psychological $40.00 level. However, a pullback through $37.50 would negate the trend and shift sentiment quickly. Until that line is crossed, dip-buying remains in play.

Gold’s recent strength adds a tailwind, with the yellow metal holding above its 50-day moving average at $3327.50 and testing resistance near $3377.66. If gold breaks higher, silver is likely to follow.

Tariffs, Trade Risk, and Economic Data: What’s Next for Silver?

Outside the Fed, traders are closely watching the looming August 1 U.S. tariff deadline. Commerce Secretary Howard Lutnick reaffirmed tariffs will begin unless trade deals are finalized—particularly with the EU. These trade tensions are driving safe-haven interest in metals. A light U.S. data calendar this week includes Powell’s remarks Tuesday and durable goods orders Friday, both of which could nudge sentiment in either direction.

Market Forecast: Bullish Silver Outlook as Long as $37.50 Holds

Silver’s near-term outlook remains constructive, with momentum favoring further upside. A clean break above $39.13 could pave the way to $40.00. So long as the dollar remains under pressure and yields stay subdued, traders will continue to seek exposure to silver.

Downside risk emerges only if the Fed delivers a hawkish surprise or the dollar finds renewed strength—otherwise, bulls remain in control.

More Information in our Economic Calendar.