Silver Price Forecast: XAG/USD edges higher as Moody's downgrade forces USD lower

• Silver prices edge higher as US Dollar weakness lifts alternative safe-haven assets.
• Credit risk clouds US outlook, lifting demand for alternative assets.
• XAG/USD consolidates below $33.00 as a tight range caps upside momentum.

Silver (XAG/USD) is trading slightly higher on Monday, holding above the $32.00 level during the US session, as broader weakness in the US Dollar fuels demand for alternative safe-haven assets. The move comes in response to Moody's downgrade of US sovereign credit, which has added to market concerns over fiscal sustainability and long-term growth prospects.

At the time of writing, silver prices are up 0.05% on the day, with spot XAG/USD last seen around $32.30. The metal is attempting to reclaim the 50-day Simple Moving Average near $32.75, which has capped gains in recent sessions.

US sovereign downgrade by Moody's triggers Dollar retreat

On Friday, Moody's Investors Service downgraded the United States' sovereign credit rating from AAA to AA1, citing growing concerns over ballooning debt levels, policy uncertainty, and the long-term impact of high interest rates. This marks the final major agency to strip the US of its top-tier credit rating, raising alarm over the country's fiscal path and potential long-term drag on economic growth.

In the aftermath, the US Dollar has come under renewed pressure, with the US Dollar index (DXY) slipping as investors reassess the Greenback's standing as the world's preeminent safe-haven currency. 

With Silver priced in dollars, the relative weakness of the USD has bolstered the appeal of precious metals.

Tariff threats, trade uncertainty, and Fed policy shifts keep Silver in focus

Ongoing geopolitical tensions and tariff threats from the Trump administration are also weighing on sentiment.

The White House reiterated over the weekend that elevated tariffs could be reinstated on countries not negotiating in "good faith," sparking concerns over trade friction and global supply chains.

Meanwhile, the market's focus shifts to this week's barrage of Federal Reserve speakers.

Five Fed officials are scheduled to speak on Monday, and traders are watching closely for clues on the trajectory of interest rates and whether the Fed will maintain its restrictive stance amid mounting fiscal and political uncertainty.

XAG/USD range-bound below key Moving Averages as momentum stalls

Silver (XAG/USD) is trading slightly higher near $32.33 on Monday, but remains confined within a tight consolidation range below the 50-day Simple Moving Average (SMA) at $32.75. 

The metal has struggled to gain sustained momentum, with resistance forming around the $33.00 to $33.23 zone, an area defined by recent swing highs and horizontal barriers. 

On the downside, immediate support lies at the 61.8% Fibonacci retracement of the March to April range at $32.07, followed by the 100-day SMA at $31.96. 

Further weakness could expose the mid-point of the above-mentioned move at $31.29. 

Momentum remains neutral, as reflected by the Relative Strength Index (RSI) holding near 47.57, offering no clear directional signal. 

Unless XAG/USD breaks decisively above $33.23 or below $31.96, the pair is likely to remain range-bound in the short term, with traders awaiting a fundamental catalyst to drive the next move.

Silver (XAG/USD) daily chart