Silver Price Forecast: XAG/USD climbs above $49.50 amid uncertainty, Fed rate cut bets

• Silver price rises to near $49.70 in Friday’s Asian session.

• Economic uncertainty, geopolitical risks and expectations of lower interest rates support the Silver. 

• The preliminary reading of U-Mich Consumer Sentiment report and Fedspeak will be the highlights later on Friday. 

Silver price (XAG/USD) climbs to around $49.70 during the Asian trading hours on Friday. The white metal holds positive ground after reaching the highest price in four decades, bolstered by safe haven flows, strong industrial demand, and expectations of the US interest rate cut. 

It has been ten days since the US government shutdown began on October 1, owing to a failure by Congress to agree on a new budget by the September 30 deadline. Economic uncertainty from concerns about tariffs, the US federal shutdown, and geopolitical risks could boost the safe-haven asset like silver. 

“There’s just a lot of concern about the global economy, and when that happens, people turn to hard assets like silver,” said Michael DiRienzo, CEO of the Silver Institute.

Additionally, the prospect of a rate cut from the Federal Reserve (Fed) might contribute to Silver’s upside. Traders are currently pricing in nearly a 95% odds that the Fed cuts rates by 25 basis points (bps) at its October meeting, while the possibility of an additional reduction in December declines to 82%, from 90%, in the past week, according to the CME FedWatch tool. Lower interest rates could reduce the opportunity cost of holding Silver, supporting the non-yielding precious metal. 

Traders will keep an eye on the preliminary reading of the U-Mich Consumer Sentiment report later on Friday. Also, the Fed’s Goolsbee and Musalem are scheduled to speak later on the same day. If the report shows a stronger-than-expected outcome, this could lift the US Dollar (USD) and weigh on the USD-denominated commodity price.