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Silver Price Forecast: XAG/USD attracts some sellers to near $51.00 on stronger US Dollar

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Silver Price Forecast: XAG/USD attracts some sellers to near $51.00 on stronger US Dollar

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New update 2025.11.12 13:40
Silver Price Forecast: XAG/USD attracts some sellers to near $51.00 on stronger US Dollar

update 2025.11.12 13:40

  • Silver price declines to around $51.10 in Wednesday's early European session.
  • A stronger US Dollar weighs on the USD-denominated Silver price. 
  • Growing economic uncertainty in the US fueled bets for a near-term Fed rate reduction.

Silver price (XAG/USD) edges lower to near $51.10, snapping the five-day winning streak during the early European session on Wednesday. The white metal loses ground amid the renewed US Dollar (USD) demand. The Federal Reserve (Fed) policymakers are set to speak later in the day, including John Williams, Anna Paulson, Christopher Waller, Raphael Bostic, Stephen Miran and Susan Collins.

The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, trades in positive territory around 99.55, bolstered by hopes for the end of the US government shutdown. This, in turn, could weigh on the USD-denominated commodity price in the near term. 

After the Senate voted 60-40 on Monday to pass a temporary continuing resolution to fund the government, the House is set to vote on the measure on Wednesday, and House Speaker Johnson said he expects it will pass quickly. If it passes in both chambers of Congress, it will head to US President Donald Trump to be signed into law. The bill will restore funding to government agencies through January 30. 

Markets brace for an imminent US government reopening that is expected to unleash a backlog of US economic releases. "Traders believe (data) will show some weakening economic numbers, and that would prompt the Fed to cut interest rates in December... that is probably encouraging the gold and silver market bulls today," said Jim Wyckoff, senior analyst at Kitco Metals.

According to the CME FedWatch tool, traders have currently priced in nearly a 68% probability that the US central bank would lower rates by 25 basis points (bps) in the December meeting, up from around a 62% chance a day ago. Lower interest rates could reduce the opportunity cost of holding Silver, supporting the non-yielding precious metal. 

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

 : 2025.11.12

Update

Last updated

 : 2025.11.12

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