Silver (XAG) Forecast: Safe-Haven Demand Fuels Breakout Above $30.98

Silver Prices Break Out as Safe-Haven Demand Surges

After weeks of consolidation, silver prices have surged past key resistance at $30.98, signaling a potential breakout. The momentum generated by this move could drive the market toward the next retracement zone between $31.81 and $32.33. Traders are eyeing immediate support at $30.98, with additional levels at $30.54, the 50-day moving average of $30.39, and the 200-day moving average of $30.12.

At 13:26 GMT, XAG/USD is trading $31.20, up $0.36 or +1.18%.

Trump’s Tariff Concerns Drive Silver Demand

Silver’s safe-haven appeal has strengthened following concerns over potential U.S. tariffs under President Donald Trump. Even though Trump has not explicitly mentioned silver in his trade policy discussions, traders are hedging against uncertainty, leading to strong demand in the spot market. The White House has already announced tariffs on Mexico and Canada, with additional measures under consideration for China.

Federal Reserve Holds Rates Steady, Traders Await Inflation Data

The Federal Reserve opted to keep interest rates unchanged on Wednesday, maintaining the current range of 4.25%–4.50%. Chair Jerome Powell reinforced the Fed’s cautious stance, stating that rate cuts would require “real progress on inflation” or a notable decline in labor market conditions.

The bond market reacted with a decline in U.S. Treasury yields, as the 10-year yield dropped 6 basis points to 4.492%, while the 2-year yield edged down nearly 3 basis points to 4.201%. Investors are now focused on Friday’s release of the U.S. Personal Consumption Expenditures (PCE) price index, a key inflation gauge that could influence the Fed’s future policy decisions.

Gold’s Strength Provides Additional Support

Silver’s rally is also benefiting from strength in gold, which surged toward its all-time high of $2,790.17. Gold’s bullish momentum, driven by safe-haven demand amid tariff concerns and economic uncertainty, has provided additional support for silver prices. Central bank buying, geopolitical risks, and uncertainty around U.S. fiscal policy have all contributed to sustained demand for precious metals.

The U.S. dollar firmed following the Fed’s decision, but silver and gold remained resilient. Market participants continue to weigh the economic impact of Trump’s policies and the likelihood of future rate cuts, which could further shape investor sentiment toward precious metals.

Silver Market Forecast: Bulls Target Higher Levels

With silver breaking past $30.98, the next upside target lies in the $31.81–$32.33 zone. If bullish momentum continues, further gains could follow. However, traders should monitor support levels closely, with $30.98 now acting as a key floor.

Short-term risks include a stronger dollar and any shift in Fed policy that could alter interest rate expectations. However, safe-haven demand, tariff concerns, and gold’s strength continue to underpin silver’s bullish outlook. Traders will be watching Friday’s PCE inflation data for further market direction.

More Information in our Economic Calendar.