Silver (XAG) Forecast: Gold Surge Lifts Silver—Is a Breakout Above $35 Next?

Silver Gains on Gold’s Record Run, but Fed Uncertainty Looms

Silver prices climbed on Tuesday, breaking above last week’s high of $34.08, driven by gold’s record-setting rally. The metal is showing strong upside potential, with the next target range between $34.87 and $35.40. However, traders should remain cautious as silver is currently well above key support levels at $32.53 and the 50-day moving average at $31.75​.

At 12:08 GMT, XAG/USD is trading $34.10, up $0.23 or +0.69%.

Gold Surge Fuels Silver’s Momentum

Gold’s breakout above $3,000 an ounce has been a major catalyst for silver’s strength. The surge is being fueled by heightened geopolitical risks and trade policy concerns. Israeli airstrikes on Gaza, which ended a two-month ceasefire, have led to a rush into safe-haven assets. Meanwhile, uncertainty over U.S. tariffs—including a 25% duty on steel and aluminum—has driven further demand for gold, indirectly supporting silver’s price action​.

Fed Policy Uncertainty Adds Market Volatility

The Federal Reserve’s two-day meeting is now in focus as policymakers assess growing stagflation risks. While inflation has eased slightly, the University of Michigan’s latest survey revealed the biggest jump in long-term inflation expectations since 1993. At the same time, economic growth is slowing, with consumer and business confidence deteriorating. The Fed is expected to hold rates steady, but traders are increasingly questioning whether the anticipated rate cuts will materialize as expected​.

Tariffs and Inflation Risks Could Delay Rate Cuts

Trade policy remains a significant wildcard. Federal Reserve Chair Jerome Powell has downplayed the inflationary effects of a single round of tariffs, but a prolonged escalation could increase price pressures. With inflation expectations on the rise, the Fed may resist cutting rates as aggressively as the market anticipates. Current futures pricing suggests three cuts this year, but Powell’s tone in the post-meeting press conference will be critical in setting market direction​.

Silver Outlook: Strong Potential, but Fed Caution Needed

Silver’s upside momentum remains intact, supported by gold’s strength and global uncertainty. However, traders should be mindful of potential volatility tied to Fed policy signals. A more hawkish stance from Powell could limit further gains in the short term, while confirmation of expected rate cuts would reinforce silver’s bullish case. For now, the next technical target remains $34.87–$35.40, but any shift in Fed expectations could lead to a sharp reassessment of silver’s near-term potential​.

More Information in our Economic Calendar.