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Silver Price Forecast: XAG/USD attracts some sellers to near $40.50 as Fed rate cut bets grow

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Silver Price Forecast: XAG/USD attracts some sellers to near $40.50 as Fed rate cut bets grow

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New update 2025.09.08 13:16
Silver Price Forecast: XAG/USD attracts some sellers to near $40.50 as Fed rate cut bets grow

update 2025.09.08 13:16

  • Silver price edges lower to around $40.65 in Monday's Asian session.
  • Markets are now pricing in three rate cuts this year after weak US jobs data. 
  • Trump said ready for 'phase two' of Russia sanctions over the Ukraine conflict. 

The Silver price ( XAG/USD) trades in negative territory around $40.65 during the early Asian session on Monday. The white metal retreats from the 14-year-old amid the prospect of a US Federal Reserve (Fed) rate cut.  The expectation for lower Federal Reserve (Fed) interest rates this year will drag the US Dollar (USD) lower and boost the Silver price.

After Friday's downbeat US jobs report, a total of three 0.25% rate cuts from the US central bank are now expected yet this year. Lower interest rates could reduce the opportunity cost of holding Silver, supporting the non-yielding white metal. The US NFP rose by 22,000 in August. This figure followed the 79,000 increase (revised from 73,000) recorded in July and below the market consensus of 75,000.

US President Donald Trump said on Sunday that individual European leaders would visit the United States (US) on Monday or Tuesday to discuss how to resolve the Russian-Ukraine war. Trump added that he was "not happy" about the status of the Russia-Ukraine war, but expressed optimism that the war would soon be settled.

Traders will closely monitor the further developments surrounding the Russian-Ukraine war. US President Donald Trump said on Sunday that individual European leaders would visit the United States (US) on Monday or Tuesday to discuss how to resolve the Russian-Ukraine conflict. 

Trump added that he was "not happy" about the status of the Russia-Ukraine war. However, he expressed optimism that the war would soon be settled. Any signs of peace talks could undermine the Silver price as it is considered a safe-haven asset. 

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.



 


Date

Created

 : 2025.09.08

Update

Last updated

 : 2025.09.08

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