Silver (XAG) Forecast: Traders Stay Cautious as Silver Eyes Breakout Above $39.53

Silver Bulls Watch Key Resistance as Fed Turmoil Lifts Gold

Silver prices are treading water for a second session, with traders weighing breakout potential against rising macro uncertainty. Despite a supportive environment—rising gold prices, dovish Fed expectations, and firm inflation concerns—silver has yet to confirm a decisive move higher.

At 13:24 GMT, XAG/USD is trading $38.43, down $0.13 or -0.35%.

Gold Surges on Fed Interference, Offers Tailwind to Silver

Gold broke out to a two-week high of $3,376.77 after President Trump removed Fed Governor Lisa Cook, triggering renewed concerns over central bank independence. Traders reacted swiftly to the perceived political pressure on the Fed, seeking refuge in hard assets.

The bond market echoed the alarm. Two-year Treasury yields slipped to 3.70%, while longer-dated yields like the 30-year rose to 4.916%, steepening the curve. This combination—lower short-term yields and inflation hedging—has historically favored both gold and silver, which offer no yield but preserve value in uncertain environments.

Rate Cut Odds Fuel Bullish Sentiment, But Silver Lags

Fed Chair Powell’s dovish tone has added momentum to the safe-haven trade. He pointed to labor market softness as a justification for a possible September rate cut, with markets now pricing in an 82% chance of a 25 basis point move. Traders are also focused on this Friday’s PCE inflation data. A soft print would further validate the easing narrative, a net positive for metals.

While gold responds more directly to Fed credibility and real yield compression, silver often follows with a lag. The gold-silver correlation remains intact, but silver’s industrial side may be tempering its gains for now.

Silver Traders Eye Breakout or Pullback Opportunities

Silver is facing immediate resistance at $39.06, last week’s high. Above that, the key level is July’s 14-year peak at $39.53. A breakout above this zone could trigger fresh momentum buying. On the downside, the 50-day moving average at $37.50 and the nearby pivot at $37.40 represent strong value areas where dip buyers are likely to emerge.

With traders showing patience, the playbook is clear: buy strength above $39.53, or wait for a retest of support near $37.50–$37.40.

Near-Term Outlook: Bullish, But Needs Confirmation

Silver remains fundamentally supported by dovish Fed signals, inflation concerns, and strength in gold. However, without a confirmed breakout above $39.53, upside remains contained in the short term. A break above that level could open the path toward a run at $40+, while support at $37.50–$37.40 should hold barring a major risk-off move.

For now, the market bias leans bullish—but confirmation is everything.

More Information in our Economic Calendar.