Silver Price Forecast: XAG/USD holds above $69.00 as traders assess Fed stance
- Market participants closely await Fed Chair Kevin Warsh’s upcoming speech at the annual Jackson Hole symposium.
- July’s PCE price index rose 0.2% month-on-month, bringing the annual inflation rate to 3.7%.
- Safe-haven demand and strong industrial needs in solar, EV, and AI sectors continue supporting Silver prices.
Silver price (XAG/USD) rises after posting losses in the previous day, trading around $69.10 per troy ounce during the Asian hours on Thursday. Investors are closely tuning into Federal Reserve (Fed) Chair Kevin Warsh’s upcoming speech at the annual Jackson Hole symposium on Friday.
Meanwhile, Silver prices are holding firm as market participants continue to evaluate the trajectory of Federal Reserve monetary policy leading into next month's crucial meeting. This steadying comes alongside fresh economic data released Wednesday, which showed July’s PCE price index accelerating to 0.2% month-on-month, beating the 0.1% forecast, while pushing the annual inflation rate up to 3.7%.
Beyond interest rate expectations, precious metals remain supported by the "debasement trade," with investors seeking protection against potential US debt crisis risks and a weakening dollar. Silver is receiving an extra boost from strong fundamental drivers, enjoying robust industrial demand tied directly to green energy technologies, solar photovoltaic panels, electric vehicles, and the expanding infrastructure required for artificial intelligence data centers.
According to TD Securities, the recent strength in precious metals is unlikely to translate into an immediate retest of record highs for Gold. While the supportive backdrop has helped Silver, the bank warns that, “with the market still pricing in hikes for 2027, and the energy market remaining a notable risk, we caution this rally may be too early for a renewed run back to record highs for the yellow metal.”
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
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