Silver Price Forecast: XAG Poised for Fresh Upswing as Fed Signals Further Easing
With tightening supplies, dovish central bank signals, and revived demand for safe haven assets, silver's surge may just be getting started.
Quick overview
- Silver's recent rally is driven by increased safe-haven demand and tightening inventories, reflecting its growing importance in industrial applications.
- The price of silver surged from $28.06 in April to $54.48 by mid-October, supported by optimism about industrial demand and supply constraints.
- Technical indicators suggest that silver may soon resume its upward trend, with strong support around $48 and potential for a retest of the $54 level.
- Geopolitical tensions and a dovish Federal Reserve stance are expected to further bolster silver's appeal as a safe-haven asset.
With tightening supplies, dovish central bank signals, and revived demand for safe haven assets, silver’s surge may just be getting started.
Silver Extends Its Safe-Haven Appeal
Silver (XAG/USD) continues to mirror the strong momentum of gold, rising sharply in recent months amid global market turbulence. The precious metal’s price surge since August reflects both investor demand for safe-haven assets and its growing relevance in industrial applications such as electric vehicles, solar power, and data center infrastructure.
Rally Driven by Supply Constraints and Industrial Optimism
From April’s low of $28.06, silver skyrocketed to $54.48 by mid-October, breaking above the 2011 high near $49.75. The rally was fueled by tightening inventories in London and Shanghai vaults, signaling shrinking physical supply. At the same time, long-term optimism about silver’s industrial demand provided fundamental support, drawing both retail and institutional buyers.
However, as the metal briefly surpassed historical highs, profit-taking emerged, dragging prices below $50. Silver closed last week at $48.66, down nearly 10% from its October peak — a healthy correction that traders see as part of a broader, intact uptrend.
Technical Picture: Support Holds, Bullish Signals Emerge
The 20-day Simple Moving Average (SMA) has repeatedly acted as a key support zone near $48, with multiple hammer candlesticks forming on the daily chart — a technical pattern often signaling bullish reversal potential. The stochastic oscillator now shows oversold conditions, reinforcing expectations of renewed buying momentum this week.
XAF Chart Daily – The 20 SMA Held Well As Support Last Week
These technical indicators suggest that XAG/USD may soon resume its climb, with a potential retest of the $54 level if risk sentiment remains stable.
Federal Reserve Policy Fuels Bullion Momentum
The Federal Reserve’s increasingly dovish stance has reignited demand for non-yielding assets such as gold and silver. With markets pricing in a 98% chance of a rate cut this week and another likely in December, the weakening dollar continues to support precious metal prices. Lower interest rates reduce the opportunity cost of holding silver, boosting its appeal among investors seeking stability amid uncertainty.
Global Tensions Add to the Bullish Case
Geopolitical tensions, sticky inflation, and the ongoing U.S. government shutdown—now one of the longest in history—have heightened safe-haven demand across global markets. Analysts expect silver to benefit from these macro pressures, potentially testing new highs if the Fed maintains its accommodative path and global uncertainty persists.
While gold may approach $5,000 by late 2025, silver’s tighter supply and growing industrial utility position it for even greater relative gains as investors diversify beyond traditional hedges.
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