- Silver price climbs to near $29.40 as US bond yields slump, although their outlook remains firm.
- Trump’s anticipated policies are expected to be pro-growth and inflationary for the US economy.
- Market experts expect the Federal Reserve to announce its next interest rate cut in March.
Silver (XAG/USD) starts 2025 with a strong performance, climbing nearly 1.50% during Thursday’s European session, reaching around $29.40. This strength comes amid a stall in the rally of US bond yields, which had surged more than 10% over the last four weeks. The 10-year US Treasury yields have fallen to about 4.55%, which lowers the opportunity cost for non-yielding assets like Silver, increasing their appeal.
Meanwhile, the US Dollar Index (DXY), which tracks the value of the Greenback against six major currencies, trades sideways near a two-year high of 108.50. Both the US Dollar and bond yields are expected to remain firm due to a more cautious stance from the Federal Reserve (Fed), which is anticipated to cut rates less aggressively in 2025. Optimism about the US economic outlook under President-elect Donald Trump also supports this trend, with his expected policies—such as immigration control, higher import tariffs, and tax cuts—likely to spur economic growth.
Goldman Sachs analysts predict that the Fed will announce its next interest rate cut in March. They expect a 25 basis point cut then, followed by additional cuts in June and September, bringing borrowing rates to a range of 3.50%-3.75%. In 2024, the Fed reduced rates three times by 100 basis points, bringing the rates to 4.25%-4.50%.
Silver Technical Analysis:
Silver has rebounded sharply to near its 200-day Exponential Moving Average (EMA), currently around $29.40. However, the overall outlook remains bearish unless Silver can break above the upward-sloping trendline from the February 29 low of $22.30, as observed on the daily chart.
The 14-day Relative Strength Index (RSI) has moved above the 40.00 level, which could signal a shift if it sustains above this threshold, potentially ending the bearish momentum. On the downside, the key support level for Silver remains the September low of $27.75. On the upside, the 50-day EMA around $30.90 stands as the immediate resistance.
Overall, Silver’s movement will likely depend on whether it can sustain above these key levels as it faces competing pressures from both US economic policies and interest rate outlooks.
Silver Daily Chart
