Silver (XAG) Daily Forecast: Bullish Bounce Expected Above $31.40 Amid Lower Yields

Market Overview

Silver prices (XAG/USD) slightly declined to $31.64 on Thursday, pausing a two-day rally as the US dollar strengthened. However, the metal remains supported by falling US Treasury yields, with the 2-year bond yield at 3.94% and the 10-year yield at 4.03%.

This decline in yields makes non-yielding assets like silver more appealing to investors. Market sentiment also favors silver, with expectations that the Federal Reserve will cut interest rates by 125 basis points over the next year. The CME FedWatch Tool shows a 94.1% likelihood of a 25-basis-point rate cut in November.

Lower Yields and Rate Cut Expectations Boost Silver

The lower bond yields, along with the prospect of multiple rate cuts, are enhancing silver’s attractiveness as an investment. As interest rates drop, precious metals typically gain favor due to their ability to hold value in a low-yield environment.

Traders are now closely watching upcoming US economic reports, including Retail Sales and Weekly Jobless Claims, which could provide more insight into the Federal Reserve’s policy path.

Central Bank Moves and Geopolitical Tensions Influence Silver Prices

In addition to US developments, central bank policies from Europe and beyond are impacting the outlook for silver. The European Central Bank is expected to cut its main refinancing rate by 25 basis points, while the Bank of England and the Reserve Bank of New Zealand are also signaling potential rate reductions.

These moves reflect global efforts to ease economic pressures, which could further support demand for safe-haven assets like silver. Although geopolitical tensions in the Middle East are contributing to safe-haven demand, the market is focusing more on economic factors.

Silver prices are likely to stay elevated if central banks continue their dovish policies and bond yields remain low, offering investors protection against market uncertainty.

Short-Term Forecast

Silver prices are likely to remain bullish if they hold above $31.41, supported by falling US Treasury yields and rate cut expectations. A break above $31.92 could drive gains.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading at $31.64, down slightly by 0.13%. Despite this small dip, the price is holding above the key pivot point of $31.41, which has been a critical support level.

On the two-hour chart, an upward trendline is providing strong support near this level, suggesting that a bounce off $31.40 could drive a potential uptrend. If silver breaks through immediate resistance at $31.92, it may aim for higher levels at $32.35 and $32.70.

However, if prices fall below $31.41, a sharp decline could follow, with key supports at $30.90 and $30.50. The 50-day EMA at $31.46 and 200-day EMA at $31.21 also support the bullish outlook above $31.41.