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Silver Price Forecast: XAG/USD reaches new record highs above $51.50

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Silver Price Forecast: XAG/USD reaches new record highs above $51.50

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New update 2025.10.13 14:39
Silver Price Forecast: XAG/USD reaches new record highs above $51.50

update 2025.10.13 14:39

  • Silver price advances amid increased likelihood of further Fed rate cuts by year-end.
  • The CME FedWatch Tool indicates pricing in nearly a 96% chance of a 25-basis-point Fed rate cut in October.
  • Silver attracted buyers on safe-haven demand amid renewed US-China trade concerns.

Silver price (XAG/USD) extends its winning streak for the fourth successive session, reaching its all-time high of $51.63 during the Asian hours on Monday. The non-interest-bearing Silver receives support from the increased likelihood of the US Federal Reserve (Fed) further rate cuts by year-end.

Consumer confidence in the United States (US) deteriorated slightly in early October, supporting the Fed rate cut bets. The preliminary University of Michigan's Consumer Sentiment Index edged lower to 55.0 for October, from 55.1 in September.

The Federal Open Market Committee (FOMC) Minutes from the September meeting suggested policymakers are leaning toward further rate cuts this year. The CME FedWatch Tool suggests that markets are now pricing in nearly a 96% chance of a 25-basis-point Fed rate cut in October and an 87% possibility of another reduction in December.

Federal Reserve Bank of St. Louis President Alberto Musalem said on Friday that the labor market is showing signs of potential weakness and that a balanced approach to monetary policy only works if inflation expectations are anchored. Meanwhile, San Francisco Fed President Mary Daly said that inflation has come in much less than she had feared. Daly further stated that the US central bank is projecting additional cuts in risk management.

The safe-haven Silver attracts buyers due to renewed US-China trade concerns. US President Donald Trump said that there's no need to meet China's President Xi Jinping at the upcoming South Korea summit and threatened to impose 100% tariffs on Chinese imports. However, Trump posted on Truth Social on Sunday, noting that China's economy "will be fine" and that the US wants to "help China, not hurt it."

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

 : 2025.10.13

Update

Last updated

 : 2025.10.13

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