Silver Price Forecast: XAG/USD stays firm above $29 amid firm Fed rate-cut hopes
Source Fxstreet
- Silver price holds the crucial support of $29.00 as Fed rate-cut bets surge.
- The expectations for Fed rate-cut increase as progress in the US disinflation process has resumed.
- Investors shift focus to the preliminary US S&P Global PMIs for June.
Silver price (XAG/USD) gains ground above the crucial support of $29.00 in Wednesday’s New York session. The white metal finds buyers amid growing speculation that the Federal Reserve (Fed) will start reducing interest rates from the September meeting.
The expectations for the Fed to begin unwinding its restrictive monetary policy framework rise due to a higher-than-expected United States (US) decline in the Consumer Price Index (CPI) and slower than forecasted growth in Retail Sales data for May. May’s data showed that progress in the disinflation process has resumed, and consumers cut heavily on discretionary spending as high inflation and interest rates by the Federal Reserve (Fed) have reduced the purchasing power of households.
Meanwhile, the market sentiment remains quiet as US markets are closed on Wednesday on account of Juneteenth. The US Dollar Index (DXY) edges down to near 105.20.
This week, investors will focus on the preliminary US S&P Global PMIs data for June, which will be published on Friday. The agency is expected to show a decline in the Composite PMI due to weakness in manufacturing as well as the service sector.
Silver technical analysis
Silver price trades in a Falling Channel chart pattern in which each pullback is considered a selling opportunity by market participants. The asset trades close to the 200-period Exponential Moving Average (EMA), which trades around $29.40, suggesting a consolidating ahead.
The 14-period Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, indicating indecisiveness among market participants.
Silver four-hour chart
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
Bitcoin experienced a sharp decline this weekend, briefly erasing its 2025 gains and dipping below its year-opening value of $93,507. The cryptocurrency fell to a low of $93,029 on Sunday, representing a 25% drop from its all-time high in October. Although it has rebounded slightly to around $94,209, the pressures on the market remain significant.
The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
