Silver (XAG) Forecast: Powell’s Guidance Could Decide Silver’s Next Big Move

Silver Holds Firm as Traders Await Fed Decision and Trump’s Economic Agenda

Silver is trading higher on Wednesday as markets anticipate the Federal Reserve’s policy decision, with traders positioning for a potential breakout. The metal remains within a tight range, holding above key technical levels, and awaiting a catalyst that could drive prices in either direction.

Currently, silver is trading above both its 50-day moving average at $30.38 and its 200-day moving average at $30.10, signaling near-term strength. Resistance stands at $30.54, while support is at $29.86. However, the key breakout level remains $30.98, which, if surpassed, could open the door to upside targets at $31.81 and $32.33. On the downside, key levels include $29.50, $29.00, and major support at $28.40.

With the Federal Reserve widely expected to hold rates steady at 4.25%-4.50%, traders are closely watching Fed Chair Jerome Powell’s post-meeting remarks for any indication of future policy direction.

At 12:10 GMT, XAG/USD is trading $30.46, up $0.06 or +0.20%.

Trump’s Economic Policies Add Market Uncertainty

This marks the first Fed meeting since President Donald Trump’s second term began, and his administration has already signaled a push for lower interest rates. However, the Fed is expected to resist immediate policy changes, given ongoing inflation concerns and economic uncertainty.

Former Dallas Fed President Robert Kaplan noted that while Trump wants the Fed to accelerate its decision-making process, policymakers are likely to hold firm until they have more clarity on the administration’s proposed tariffs, regulatory shifts, and immigration policies. While some of these measures could be disinflationary, others—such as tariffs and labor shortages—could add upward pressure on prices.

Esther George, former Kansas City Fed President, reinforced that the central bank must focus on its mandate of price stability, rather than political influence. This sets up a potential conflict between the White House’s push for rate cuts and the Fed’s cautious approach.

Market Awaits Powell’s Signals on Future Rate Cuts

While traders see little chance of an immediate rate cut, the Fed’s statement and Powell’s press conference will be key drivers of market sentiment. Investors are particularly focused on whether the Fed acknowledges any economic slowdown that could justify easing later in the year.

Bond markets are already positioning for the decision, with Treasury yields edging lower in anticipation of Powell’s comments. If the Fed signals a willingness to cut rates sooner than expected, silver could benefit from renewed safe-haven demand. Conversely, if Powell reinforces a wait-and-see approach, silver may struggle to break higher in the short term.

Adding to the uncertainty, Trump’s renewed tariff threats against Canada and Mexico could introduce fresh inflationary risks, complicating the Fed’s ability to maintain a steady policy stance. If trade tensions escalate, silver could see additional volatility as investors weigh the potential for economic disruptions.

Silver’s Near-Term Outlook Hinges on Fed Commentary

Silver’s price action remains tightly bound, but a breakout is increasingly likely as markets digest the Fed’s stance and Trump’s economic policies. If Powell signals that rate cuts are still a distant prospect, silver may face near-term resistance, with downside targets at $29.50 and $29.00. However, any dovish tone from the Fed could push silver above $30.98, paving the way for a move toward $31.81 and beyond.

Traders should be prepared for heightened volatility following the Fed decision, with silver’s next move heavily dependent on Powell’s tone and any unexpected developments from the White House.

More Information in our Economic Calendar.