Silver (XAG) Forecast: Silver Rally Stalls—Can $37.87 Trigger the Next Leg Up?

Fed Uncertainty and Treasury Auctions Pressure Silver

Silver eased lower Wednesday as a stronger Treasury market weighed on the non-interest-bearing metal. The 10-year Treasury yield climbed more than 3 basis points to 4.228%, extending its rebound ahead of $67 billion in new debt auctions this week. Rising yields have made interest-bearing assets more attractive, tempering silver’s recent rally and triggering a pause just below resistance.

At 12:41 GMT, XAG/USD is trading $37.70, down $0.12 or -0.31%.

The metal briefly tested the short-term pivot level at $37.87, which now acts as a technical barrier. A sustained move above this point could unlock fresh upside potential toward $39.53. Until then, traders are watching key downside levels including the 50-day moving average at $36.80, and deeper support near $36.21, the recent swing bottom.

ISM Services Miss Fuels Stagflation Worries

Fresh concern over the U.S. economic outlook added weight to the market. July’s ISM non-manufacturing index dropped to 50.1, below both consensus and June’s print of 50.8. The underlying details raised eyebrows: the prices index jumped to 69.9—suggesting persistent inflation—while employment fell further into contraction at 46.4.

Deutsche Bank analysts flagged the data as troubling, warning that tariff-driven stagflation risks could complicate the Federal Reserve’s policy path. That tension between slowing growth and sticky inflation remains critical for precious metals, which typically gain from lower rates but can also respond to inflation hedging demand.

Tariff Risks Lurk as Traders Monitor Fed Speakers

Silver also remains sensitive to trade rhetoric. President Donald Trump’s renewed threats of tariffs on Indian goods tied to Russian oil imports have reintroduced geopolitical risk into the commodity space. With few fresh economic releases scheduled, traders focused on speeches by Fed officials including Susan Collins and Mary Daly, looking for any policy signals ahead of September’s FOMC meeting.

Despite market nerves, CME FedWatch shows odds of a rate cut in September remain elevated, reinforcing potential tailwinds for silver in the medium term.

Outlook: Bullish Above $36.21, But Momentum Stalled

Technically, silver’s uptrend remains intact while it holds above $36.21. However, the inability to break above $37.87 leaves bulls needing a catalyst to reignite momentum. A close above that level could invite fresh buying toward $39.53, while weakness below $36.80 would shift attention back to the $36.21 floor.

With bond yields climbing and inflation data mixed, silver is stuck in a holding pattern. Traders should watch Fed commentary and tariff headlines closely for clues, but strong support levels continue to offer a bullish bias in the short term.

More Information in our Economic Calendar.