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Silver Surges Toward $50 as Fed Rate-Cut Bets Fuel Safe-Haven Demand
Traders' Opinions
Summary:
Silver rallied sharply at the start of the week, nearing the key $50.00 psychological mark amid renewed safe-haven demand and growing expectations of a December rate cut by the Federal Reserve
Buy
TradingXAGUSD
EXP
49.895
Entry Price
52.500
TP
48.500
SL
50.202 +1.878 +3.89%
0
Point
Flat
48.500
SL
CLOSING
49.895
Entry Price
52.500
TP
Silver (XAG/USD) extended its winning streak on Monday, surging toward the $50.00 per ounce level as investors piled into safe-haven assets amid renewed uncertainty about the global economic outlook. At the time of writing, the precious metal trades around $49.85, up roughly 3.0% on the day, after earlier touching its highest level in three weeks at exactly $50.00.
The rally underscores a broad shift in market sentiment as traders bet that the Federal Reserve (Fed) is edging closer to the start of a monetary easing cycle. A combination of soft U.S. data, including a decline in consumer confidence and disappointing employment figures, has reinforced expectations that policymakers may begin cutting interest rates before the end of the year.
The University of Michigan’s Consumer Sentiment Index showed a steep drop in confidence, while ADP private payrolls revealed slower-than-expected job growth—signs that the U.S. economy is losing momentum under the weight of tight credit conditions. According to the CME FedWatch Tool, futures markets now assign a 65% probability that the Fed will deliver a 25-basis-point rate cut at its December policy meeting.
Lower interest rates typically reduce the opportunity cost of holding non-yielding assets such as precious metals, making Silver and Gold more appealing to investors seeking both protection and potential capital gains.
Adding to the mix, the U.S. political landscape has contributed to volatility. News that U.S. senators have reached a tentative deal to end the ongoing government shutdown has modestly improved investor sentiment. The Senate is expected to vote later this week on legislation to reopen federal agencies—a move that could restore some confidence in fiscal stability but may also temper the recent wave of safe-haven buying.
Beyond domestic politics, easing trade tensions between the U.S. and China provided an additional layer of support for risk sentiment. Beijing’s recent decision to temporarily lift export restrictions on key “dual-use” industrial materials—Gallium, Germanium, and Antimony—was welcomed as a constructive step toward stabilizing bilateral relations. This development has reduced fears of a broader trade conflict that could disrupt global supply chains and commodity demand.
However, the broader economic narrative remains cautious. Persistent concerns about slowing global growth, subdued inflation, and fragile investor confidence continue to underpin precious metals. Silver, in particular, benefits from its dual role as both a monetary and industrial asset—providing protection against uncertainty while maintaining exposure to industrial demand trends in sectors such as renewable energy and electronics.
Technical Analysis
From a technical perspective, Silver’s latest price action reinforces the bullish outlook. The metal has broken out of a textbook Inverse Head & Shoulders pattern on the 1-hour timeframe, a formation that often signals a potential bullish reversal. The breakout above the key resistance at $50.00 marks a decisive shift in short-term momentum.
Technically, Silver continues to trade comfortably above the 50-period Exponential Moving Average (EMA50), a sign of sustained upward momentum. The intraday charts also show the metal aligning with a short-term ascending trendline, reinforcing the dominance of the broader bullish trend. Relative strength indicators (RSI) remain in positive territory, flashing bullish signals even as they approach overbought levels—suggesting momentum remains intact but ripe for short-term consolidation.
If the rally continues, immediate resistance is seen at $50.50, followed by $52.50, where profit-taking could emerge. On the downside, initial support lies at $49.30, with deeper levels near $48.70 offering potential re-entry zones for buyers.
TRADE RECOMMENDATION
BUY SILVER
ENTRY PRICE: 50.10
STOP LOSS: 48.50
TAKE PROFIT: 52.50
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