Silver Rallies Near $39 on Fed Rate Cut Bets & Solar Demand.
XAG/USD rallies toward $39.00 amid rising Fed rate cut expectations
FUNDAMENTAL OVERVIEW:
Silver (XAG/USD) climbs over 1%, trading near $38.98 per ounce in early North American hours Thursday, supported by rising Fed rate cut expectations. Lower rates reduce the appeal of interest-bearing assets, boosting demand for precious metals. Markets now price an 88% chance of a September cut, up from 82% last week, per CME Fed Watch.
Political pressure on the Fed intensified after President Trump’s attempt to replace Governor Lisa Cook with a more dovish candidate. Meanwhile, New York Fed President John Williams noted that rates will likely fall but stressed data dependence ahead of September’s decision.
Beyond monetary policy, silver gains support from surging industrial demand. China added 93 GW of solar capacity in May—a 300% annual increase—before regulatory hurdles take effect. Solar cell exports also jumped over 70% in H1 2025, fuelled by Indian demand. Silver, vital in photovoltaic cells, continues to benefit from this trend.
XAG/USD TECHNICAL ANALYSIS CHART:
Technical Overview:
Silver is trading within an up channel.
Silver is moving above all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in Buying Zone, while the Stochastic oscillator suggests Positive trend.
Immediate Resistance level: 39.00
Immediate support level: 38.60
HOW TO TRADE XAG/USD
Silver pulled back after a sharp rally but quickly regained momentum, drawing fresh buying interest that propelled it past a key resistance zone. The metal now hovers near immediate resistance, and a sustained break above this level could pave the way for further upside, potentially retesting record highs.