Silver Price Forecast: XAG/USD Holds Above $54 as Fed Rate Cut Bets and Bank Jitters Fuel Rally
Silver has basically held its own near $54.30 after a period of multi-week gains that have seen the metal surge alongside gold's recent...
Quick overview
- Silver has maintained a strong position near $54.30, benefiting from an 8% increase in the past week due to expectations of a Federal Reserve interest rate cut.
- Market sentiment indicates a 96.7% chance of a 25-basis-point rate cut at the Fed's upcoming meeting, making silver more attractive as a non-yielding asset.
- Global uncertainties and challenges in the banking sector are enhancing silver's appeal as a safe-haven investment.
- Technical analysis shows a firm uptrend for silver, with potential for further gains if it holds above $53.50.
Silver has basically held its own near $54.30 after a period of multi-week gains that have seen the metal surge alongside gold’s recent jump above $4,300. And make no mistake, it’s been a strong rally – the metal has jumped by more than 8% in the past week, thanks to growing expectations that the Federal Reserve is going to cut interest rates, safe-haven flows, and some substantial industrial demand.
According to CME’s FedWatch tool, the markets are now pricing in a 96.7% chance of a 25-basis-point rate cut at the Fed’s October 29-30 meeting – its first rate cut in over a year. Lower interest rates make non-yielding assets like silver more attractive, while also giving a boost to the industrial demand that the metal relies on – all in all, a double-edged sword that works out well for a metal that plays both safe-haven and industrial roles.
With all the global uncertainty out there, investors are getting nervous, and that’s helping silver’s appeal as a hedge against market turbulence. The US regional banks aren’t doing so great, there are ongoing trade frictions and manufacturing growth is slowing – all of which is making silver look more attractive as a way to avoid some of that market turmoil.
[[XAG/USD-graph]]
And on the institutional side, things are improving too. According to Bitwise’s Q3 2025 Bitcoin Adoption Report, the amount of Bitcoin held by public companies surged a whopping 28% to $117 billion, which is a sign that these big investors are expanding their exposure to hard assets more broadly, including the likes of gold and silver, amid all the trends of de-dollarization and diversification.
Silver’s Technical Outlook: Uptrend Remains Firm
On the 4-hour chart, silver is flowing within a pretty clear ascending channel – which is all the proof we need that the trend is well and truly up. This is supported by a series of higher highs and higher lows on the chart, and the fact that the 20-EMA is well above the 50-EMA reinforces the sense of a strong uptrend.
However, recent spinning tops and Doji candles near the upper channel boundary look like the market is getting a bit knackered after that big climb. And the RSI near 66 suggests that we’re getting close to being in overbought conditions. A pullback to $53.50-$52.90 would likely be a healthy development before the next advance.
If silver holds its nerve above $53.50, then a move up towards $55.38 and $56.31 is on the cards, which is where the upper channel resistance is. But a drop below $52.90 and it could trigger a short-term correction, potentially down towards $52.16, where the 50-EMA will come to the rescue.
Silver (XAG/USD) Trade Setup and Outlook
For short-term traders, buying dips near $53.00-$53.50 is still attractive – and targets $55.30-$56.30 with a stop below $52.10. And to be honest, the momentum is still looking pretty good – and if the Fed does deliver on that rate cut we can expect silver to continue making gains alongside gold – potentially setting it up for a move up towards $57.00 in Q4 as investors get their confidence back and start taking a bit more risk on.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save