Silver Price Forecast: XAG/USD maintains position near $39.00, five-week highs

• Silver price receives support as the expectations grow for a Fed rate cut in September.

• The CME FedWatch Tool indicates an 87% chance of a 25-basis-point rate cut in September.

• The industrial demand for Silver could increase as China’s solar cell exports rose more than 70% in H1.

Silver price (XAG/USD) halts its three-day winning streak, trading around $38.80 per troy ounce during the Asian hours on Monday. The price of the non-yielding Silver registered nearly 2% gains in the previous session amid rising likelihood of a US Federal Reserve (Fed) interest rate cut in September.

Fed Chair Jerome Powell spoke at the Jackson Hole symposium on Friday, indicating risks to the job market were rising but also noting inflation remained a threat and that a decision wasn't set in stone. Powell further stated that the Federal Reserve still believes it may not need to tighten policy solely based on uncertain estimates that employment may be beyond its maximum sustainable level.

According to the CME FedWatch tool, traders are now pricing in nearly an 87% odds of a 25 basis points (bps) rate cut in September, up from 75% before the speech. Focus will also shift to the upcoming release of the Q2 US Gross Domestic Product Annualized and July Personal Consumption Expenditures - Price Index data, the Fed's preferred inflation gauge.

China has installed over 93 gigawatts of solar capacity in May, a 300% annual surge, ahead of policy changes that will make it harder to connect new panels to the grid. Additionally, China’s solar cell exports jumped more than 70% in the first half of 2025, fueled by strong photovoltaic (PV) demand from India. Silver demand may grow as it is used in the photovoltaic cells’ conductive paste.