Silver extends rally to three-week high near $50 on Fed rate cut hopes

• Silver advances to a three-week high near $50, up 3.0% on the day.
• Weak US data and recession fears revive expectations of a Federal Reserve rate cut.
• Progress toward ending the US government shutdown improves sentiment but limits further gains.

Silver (XAG/USD) continues its advance at the start of the week, trading around $49.85 per ounce on Monday at the time of writing, up 3.0% for the day and marking its highest level in three weeks at $50.00 earlier in the day. The precious metal benefits from renewed safe-haven demand, supported by growing concerns about the global economic outlook and expectations of monetary easing by the Federal Reserve (Fed).

Weakness in recent US data, including disappointing private employment figures and a sharp decline in the University of Michigan Consumer Sentiment Index, reinforces speculation that the Fed could start cutting interest rates as soon as December. According to the CME FedWatch tool, markets now assign a near 65% chance of a 25 basis points cut at the next meeting. Lower interest rates typically reduce the opportunity cost of holding non-yielding assets like Silver, making the metal more attractive to investors.

Meanwhile, news that US senators have reached a tentative deal to end the government shutdown has slightly improved overall market sentiment. The US Senate is expected to vote this week on a measure to reopen federal agencies and restore confidence in the fiscal outlook. This progress could limit part of the safe-haven demand that has supported Silver and Gold in recent sessions.

In addition, easing trade tensions between the US and China also contribute to a more constructive tone in global markets. Beijing's decision to temporarily lift export restrictions on certain "dual-use" materials, including Gallium, Germanium and Antimony, is seen as a positive step toward stabilizing bilateral relations.

Nevertheless, the ongoing uncertainty surrounding the US economy and the prospect of lower interest rates continue to underpin the precious metals complex. As long as doubts persist over growth momentum and inflation trajectory, Silver is likely to remain well supported in the short term, with potential to break the $50.00 threshold.

Silver Technical Analysis: Breaks key resistance at $49.40 but stalls below the psychological $50 level

Silver price breaks above a key resistance level at $49.40, reinforcing the short-term bullish bias. However, the approach toward the psychological $50.00 threshold and a Relative Strength Index (RSI) nearing overbought territory call for caution, as a short-term pullback or consolidation cannot be ruled out.

On the upside, a sustained move beyond $50.00 could open the door for a retest of the all-time high recorded on October 15 at $54.86. Conversely, a drop back below $49.40 would expose Silver to renewed downside pressure, with potential declines toward the November 5 low at $46.88 and the October 28 trough at $45.56.