Silver Forecast: Is $30.44 the Pivotal Level for XAG/USD’s Next Major Rally?

Can Silver Break Free From the $30.44 Resistance?

Silver prices closed lower last week, grappling with technical resistance and macroeconomic challenges. The $30.44 level, a critical weekly pivot, remains the key chart point controlling market direction. Meanwhile, broader influences, including U.S. Federal Reserve policy, Treasury yields, and geopolitical developments, are adding complexity to the market outlook.

Last week, XAG/USD settled at $30.35, down $0.05 or -0.17%.

Will Trump’s Economic Policies Influence Inflation and Silver?

Donald Trump’s proposed fiscal and trade policies, including tariffs and infrastructure spending, carry potential inflationary implications. Increased consumer prices due to tariffs could bolster silver’s appeal as an inflation hedge. However, these measures could also strengthen the U.S. dollar, presenting a counterbalance to any bullish impact on precious metals​.

How Do Fed Expectations Impact Silver’s Prospects?

The Federal Reserve’s outlook remains a primary driver for silver. Recent softer inflation data has raised expectations for rate cuts, with markets pricing in the potential for two reductions this year. A dovish stance supports silver by lowering the opportunity cost of holding non-yielding assets. Conversely, unexpected resilience in U.S. economic data could dampen these expectations, pressuring silver prices​​.

Are Treasury Yields and Dollar Strength Keeping Silver in Check?

Treasury yields, which remained near multi-month highs, have been a consistent headwind for silver. Higher yields enhance the appeal of fixed-income investments, detracting from silver’s attractiveness. The U.S. dollar also showed strength last week, supported by positive economic indicators, making silver more expensive for foreign buyers​​.

Does Gold Provide Clues for Silver’s Direction?

Gold, often seen as a companion asset, remains a key influence on silver prices. Gold’s movement near critical resistance levels provided some support for silver sentiment. However, silver’s substantial industrial demand component introduces additional challenges, particularly as global economic uncertainty clouds growth prospects​​.

Market Forecast: Can Silver Gain Momentum?

Silver’s ability to overcome $30.44 will determine the market’s short-term outlook. A breakout above this resistance could drive prices toward $32.33, with potential for further gains if macroeconomic data aligns favorably. Failure to clear this level, however, could see the metal retreat to $28.75. This level could act as a floor, or the trigger point for further losses.

The week ahead presents significant data points, including U.S. manufacturing reports, inflation figures, and Federal Reserve commentary. Traders should prepare for increased volatility, as silver’s dual role as a monetary and industrial asset ensures it remains at the crossroads of economic and geopolitical forces.

More Information in our Economic Calendar.