Silver Price Forecast: XAG Holds $40.89, Bulls Target Breakout Toward $42

Silver is still in demand as traders prepare for a dovish Fed. Market pricing now expects at least 2 rate cuts by year...

Written by: Arslan Butt • Friday, September 5, 2025 • 1 min read

• Last updated: Friday, September 5, 2025

Quick overview

Silver demand remains strong as traders anticipate a dovish Federal Reserve, with expectations of at least two rate cuts by year-end.
Recent US labor data, including a disappointing ADP report, has negatively impacted the US dollar and enhanced silver's appeal as a safe haven.
Silver is currently trading at $40.89, consolidating in a rising channel, with key support at $40.40 and resistance at $41.45.
Traders are advised to consider long positions near $40.40-$40.90, with potential upside targets at $41.45 and $42.00.

Silver is still in demand as traders prepare for a dovish Fed. Market pricing now expects at least 2 rate cuts by year end and that’s supported by soft US labour data. August’s ADP report showed private sector jobs rose by only 54,000, well below expectations and jobless claims ticked up. That’s weighed on the US dollar and silver’s safe haven appeal.

Global uncertainty is also in play. Trade tensions and shifting tariff policies have investors cautious and that’s boosting silver’s dual role as a safe haven and industrial metal used in electronics and renewable energy. Together that’s a good setup for silver prices.

Technical Outlook for Silver

Silver is trading at $40.89 and consolidating in a rising channel since late August. Buyers have defended the $40.40 zone and kept higher lows intact – a bullish sign. The 50-EMA at $40.87 is the pivot and the 200-EMA at $39.26 is the long term trend line.

[[XAG/USD-graph]]

Momentum indicators are stable. The RSI is 54 and showing improving demand but not overbought. Candlestick patterns are spinning tops – short term indecision but no reversal. The August 29th candle was a bullish engulfing pattern – buyers are still interested.

Support: $40.40 and $40.00
Resistance: $41.45 and $42.00
Trend: Rising channel, higher lows intact

Silver Price Chart - Source: Tradingview — Silver Price Chart – Source: Tradingview

Silver (XAU/USD) Trade Setup and Outlook

For traders the setup is for longs. Entries near $40.40-$40.90 are good value and stops below $40.00 to limit risk. Upside targets are at $41.45 and $42.00 which is the channel upper boundary. A break above $42 could unleash a stronger move higher and confirm the trend.

In simple terms silver is still in an uptrend. As long as buyers defend the support zones and moving averages, dips are buying opportunities not selling opportunities – positioning traders for gains as momentum builds to $42 and beyond.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.