Silver Rally 2025: XAG/USD Eyes $49 as Fed Cuts Fuel Safe-Haven Boom
Silver is sitting at $47.00, consolidating after weeks of up moves as investors are cautious on a US government shutdown...
Quick overview
- Silver is currently priced at $47.00, consolidating amid investor caution due to a potential US government shutdown and geopolitical tensions.
- The weakening US dollar has made silver more affordable for international buyers, contributing to increased safe-haven demand.
- Analysts predict a 90% chance of a 25-bp rate cut by the Fed in October, which is supporting silver's appeal as a non-yielding asset.
- Technically, silver is respecting a rising channel with key resistance at $47.45, and a break above this level could lead to further gains.
Silver is sitting at $47.00, consolidating after weeks of up moves as investors are cautious on a US government shutdown and geopolitical tensions. These risks have boosted safe-haven flows into precious metals and silver is tracking gold’s move to record highs earlier in the week.
The weakening US dollar has added fuel to the fire. The dollar index has fallen for the third day in a row, making silver cheaper for overseas buyers. Analysts say fiscal uncertainty in Washington and new tariffs for October have increased investor caution and silver’s role as a hedge.
Fed Easing Bets Weigh on the Dollar
Monetary policy is still the main driver. Markets are pricing in a 90% chance of a 25-bp cut in October and 70% in December according to CME FedWatch. With Treasury yields under pressure, silver (like gold) is benefiting from a low rate environment where non-yielding assets are more attractive.
[[XAG/USD-graph]]
Meanwhile, weaker US labor data and uncertainty around delayed economic data releases have cemented the dovish outlook. “Silver thrives in times of economic stress and monetary easing” one New York based strategist said.
Silver (XAG/USD) Technical Outlook: $47.45 Break
From a technical perspective silver is respecting the rising channel since mid-September. The 50-SMA at $46.04 and 100-SMA at $43.67 are acting as supports, so the bullish setup is intact.
Key points from the chart:
- Resistance is at $47.45; a break above could see $48.28 and $49.05.
- Momentum is healthy with RSI at 58, so there is room before overbought.
- A pullback to $46.62-$46.04 would be a normal retest, not a trend reversal.
Trade Setup: Above $47.45 is long, stop below $46.60, target $48.28-$49.05. A bearish rejection could see silver retest support before buyers take control.
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