Silver (XAG/USD) closed last week with remarkable strength, finishing at $39.69 per ounce, its highest weekly close in more than a decade. This bullish breakout above the long-standing ceiling of $39.53 signals a potential shift in momentum, with traders now eyeing the $44.22 resistance zone as the next major target. However, all eyes are now on Friday’s U.S. Non-Farm Payrolls (NFP) report, which could determine whether silver continues its rally or faces a short-term correction.
Silver Breaks Multi-Year Resistance
Silver ended the week with a 2.13% gain (+$0.83), capping an impressive 8% monthly rally in August. The breakout above $39.53, which had capped price action since July, has confirmed a long-term bullish structure. Historically, such decisive moves often lead to extended momentum phases, especially when accompanied by strong macroeconomic tailwinds.
The technical picture now shows clear upside potential, with little resistance until the $44.22 zone, last tested over a decade ago. This clean breakout gives silver traders a bullish edge heading into September, provided the momentum can be sustained.
Macro Drivers: Fed Cuts and Dollar Weakness
The rally in silver is not purely technical—it is supported by macro fundamentals:
- Rate Cut Expectations: Markets are pricing in nearly an 89% probability of a September Federal Reserve rate cut, according to the CME FedWatch tool. Lower interest rates reduce the opportunity cost of holding silver, bolstering demand.
- Dollar Weakness: The U.S. Dollar Index (DXY) fell more than 2% in August, slipping below key trend levels. A weaker dollar typically supports silver prices, as the metal becomes more affordable for international buyers.
- Political Uncertainty: Rising concerns over the Federal Reserve’s independence, fueled by political tensions, have also increased investor appetite for safe-haven assets like silver.
Technical Levels to Watch
- Immediate Resistance: $40.00, followed by the major hurdle at $44.22.
- Key Support: $39.53 (former resistance turned support), followed by $39.00, $36.31, and $35.28.
- Long-Term Anchor: The 52-week moving average at $33.33 remains intact and provides deeper support for the bullish trend.
The breakout above $39.53 has confirmed a bullish structure, making pullbacks toward support zones likely to attract new buyers.
Spotlight on Non-Farm Payrolls (NFP)
Friday’s NFP report is shaping up to be the next big catalyst for silver.
- Weaker Jobs Data: A disappointing labor print (like July’s soft jobs report and downward revisions) would likely strengthen expectations for a September rate cut, boosting silver prices further.
- Stronger Jobs Data: A surprise upside in employment figures could challenge Fed easing bets, strengthen the U.S. dollar, and trigger a short-term pullback in silver.
Economists at Barclays are forecasting just 75,000 new jobs in August, with unemployment steady at 4.2%. Such a result would likely reinforce the case for Fed cuts and extend silver’s rally toward $44.
Outlook: Bullish Bias Stays Intact
The bigger picture for silver remains firmly bullish. The breakout above $39.53 confirms long-term strength, and as long as prices stay above this critical level, dips are likely to be short-lived.
- Base Case: Silver consolidates above $39.53 and targets $44.22 in the coming weeks.
- Risk Case: Stronger U.S. jobs data sparks profit-taking, pushing prices back toward $37–$38 support zones.
Overall, the trend remains upward, and silver continues to position itself as one of the standout assets of 2025, fueled by both technical confirmation and macroeconomic support.
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