Silver (XAG) Forecast: Dollar Slips After Downgrade—Silver Rally in Play?

Silver Steadies as Dollar Weakens and Credit Concerns Stir Safe-Haven Appeal

Silver prices opened the week with modest gains, holding firm above key technical support as a sliding U.S. dollar and renewed trade tension stoked safe-haven demand. Traders are watching the $32.80 level closely, which aligns with the 50-day moving average and marks a potential breakout trigger toward $33.25 and $33.70.

At 10:32 GMT, Silver (XAG/USD) is trading $32.54, up $0.25 or +0.77%.

Dollar Retreats After U.S. Credit Downgrade—Supportive for Precious Metals

The U.S. dollar lost ground across the board Monday, retreating sharply against the yen and euro after Moody’s downgraded the U.S. sovereign credit rating by one notch. The decision raised alarms over Washington’s $36 trillion debt load and its long-term fiscal credibility. The dollar index dipped as much as 0.7% against the yen, marking a 10-day low, while the euro climbed 0.73% to $1.1247. The downgrade has reignited concerns over the dollar’s role as a global safe haven, lending support to hard assets like silver.

U.S. Trade Policy Uncertainty Clouds Risk Appetite

Geopolitical risk continues to add fuel to safe-haven flows. Treasury Secretary Scott Bessent confirmed that President Trump intends to move forward with tariffs on countries not engaging in “good faith” trade negotiations. This follows last month’s threats and adds further uncertainty to global trade channels. Despite some progress in talks with the EU and a framework deal with Britain, market participants remain skeptical about Washington’s ability to deliver broader agreements—especially with talks stalling with Japan.

Fed Rate Cut Expectations Tempered but Still on the Table

Despite recent hawkish shifts in Federal Reserve tone, last week’s soft retail and inflation prints have kept the door open for rate cuts later this year. Traders now price in around 52 basis points of easing, down from over 100 bps previously. This cooling of expectations has pressured the dollar further and offered underlying support to metals.

Silver Forecast: Watch $32.80—Breakout Could Trigger Fresh Momentum

Silver remains technically supported between $32.19 and $31.45, with the 200-day moving average just beneath at $31.34 acting as a firm floor. A decisive move above $32.80 could ignite momentum toward $33.70, while failure to hold current levels may prompt a test of $31.34. With the dollar under scrutiny, trade policy uncertainty rising, and safe-haven flows returning, silver’s near-term bias tilts bullish. Traders should keep a close eye on resistance triggers and dollar performance for directional cues.

More Information in our Economic Calendar.