As I sit down to pen this article, I’m met with a feeling of déjà vu.
The difference is that I have actually been here before, many times in the last few months, in fact, with silver seemingly hitting new highs every time I check my charts.
Naturally, this time is no different, with silver rocketing to new highs in yesterday’s trading, while handsomely outperforming its yellow counterpart, gold, in the last seven days.
As is almost tradition by now, let’s discuss some of the fundamentals responsible for the recent moves in precious metal pricing.
Silver (XAG/USD), OANDA, TradingView,23/09/2025
Dust settles on dovish Fed, boosting silver prices
Let’s start by establishing a fundamental economic concept: in a total vacuum, lower interest rates benefit non-yielding assets like silver, since the opportunity cost for holding precious metals compared to cash is reduced.
So, why did the recent Federal Reserve rate cut hurt silver pricing?
The devil is, of course, in the details.
Naturally, nothing in the market is black and white; in this case, Fed Chair Jerome Powell described the cut as a ‘risk-management’ cut rather than a response to a weakening economy.
This would be a much more hawkish stance than previously thought, which, at least at first, would seriously temper expectations that this would mark the first cut of a deep-cutting cycle.
Considering the predicted trajectory of Fed interest rates before this, generally pegged at two further cuts before year-end, even the slightest suggestion that rates could be kept higher not only weakened demand for precious metals, but also simultaneously strengthened the dollar.
What’s happened since then, however, is a textbook example of reaction versus response.
Silver (XAG/USD) & DXY, OANDA & TVC, TradingView, 23/09/2025
Having had time to digest, it would seem that the market uncertainty has all but dissipated, with the recent rally in silver pricing a shining example.
While Powell’s recent ‘risk-management’ comments can’t be ignored, against the backdrop of recent US labour and GDP data, the numbers otherwise point to further rate cuts, assuming inflation remains under control.
While it would be fair to say that the financial markets’ collective hive mind is not always known for robust decision-making in light of shock economic news, the dust has now settled, with the narrative around Fed monetary policy returning essentially to the dovish angle held ahead of the recent decision.
CME FedWatch, OANDA, TradingView, 23/09/2025
This goes double when considering dissent from FOMC member Stephen Miran, who voted for a more aggressive 50 basis point cut in the most recent decision, showing some support for further rate cuts already exists amongst decision-makers.
Strong fundamentals bolster silver prices
At risk of repeating myself from previous coverage, here’s a quick-fire round on the macro themes responsible for the current rally:
- Questions remain on sovereign debt, especially in United States, with the recent downgrade in credit rating fresh in the collective memory. Similar to 2011, uncertainty on the long-term solvency of major world economies, especially with no shortage of radical US policy changes, directly benefits silver pricing
- Silver demand continues to outstrip supply, which in and of itself is a relatively new phenomenon. Used both as a store of value and across industry alike, the recent classification of silver as a ‘critical mineral’ by the US Government further cements its use case on a significant scale. In line with the most basic principles of economic theory, if demand cannot be met by supply, prices rise, as seen particularly of recent
- Usually lumped under the moniker of ‘safe-haven flows’, precious metals like silver are often used as a reliable store of value in times of economic uncertainty. In 2025, there has been no shortage in demand for safe-haven assets, with increased geopolitical tensions, questions on sovereign debt, and, of course, US trade tariffs, all making valuable contributions
- Less so a macroeconomic factor, more so a consequence of the above, a weakening dollar has helped extend the current rally in precious metal pricing, since precious metals are typically priced in USD. So far, 2025 remains on record as one of the U.S. dollar’s worst-performing years in some time, helping boost silver prices
In a nutshell, and owing to the rock-solid fundamentals, markets have clearly shown their preference for higher silver pricing this year, with current prices on pace for their best percentage performance since 2010.
Since late August, it would appear that markets are ready to metaphorically bite the hand off any opportunity to push precious metals higher, with no obvious signs of slowing down any time soon.
Silver XAG/USD: Technical Analysis 23/09/2025
Silver (XAG/USD), OANDA, TradingView, 23/09/2025
- Renewing multi-year highs recently, XAG/USD currently trades toward the upper boundary of the upwards channel. Price may need to retrace lower before an attempt higher, with bulls likely to target $45 first, then onto $45.69
- According to the ADX, current trend strength is at its highest level since June 2024, suggesting conviction in market direction. For the contrarians, shorts should be approached with extreme caution
