Silver prices are edging higher, reaching around $37.85 in Thursday’s Asian session, supported by ongoing Fed rate cut expectations and rising industrial demand.
Fed Rate Cut Expectations and Industrial Demand Fuel Silver’s Rise
The silver market is gaining momentum as traders anticipate the US Federal Reserve (Fed) to lower interest rates in the upcoming September meeting. Despite concerns raised by last month’s rise in US wholesale prices and strong retail sales figures, investors remain optimistic about potential rate reductions by the Fed this year. According to the CME FedWatch Tool, there is an 83% probability of a rate cut at the next policy meeting, which is likely to reduce the opportunity cost of holding non-yielding assets like silver.
Focus Shifts to Jackson Hole Symposium
With the Jackson Hole symposium approaching on Friday, all eyes are on Fed Chair Jerome Powell’s speech. Any hints about the Fed’s future policy stance, especially a potential “wait and see” approach or a hawkish tone, could strengthen the US Dollar (USD) and undermine silver’s upward momentum. However, should Powell lean towards dovish guidance, silver prices could continue to rise.
Industrial Demand Adds Support
In addition to the Fed’s monetary policy actions, rising industrial demand is playing a pivotal role in silver’s price movement. Notably, silver is seeing increased use in renewable energy sectors, particularly in solar panel production. With solar photovoltaic systems installations reaching record highs, silver’s role in these technologies is expected to contribute significantly to its overall consumption in 2025.
Silver’s Technical Outlook
Silver is consolidating around the $37.50 mark, with its price likely to continue climbing if it maintains its position above this level. If silver can break through further resistance levels, it may push toward $38 or beyond, supported by both the favorable macroeconomic outlook and growing industrial demand.
As the market awaits the Fed’s signals, silver continues to be a strong contender for upward price action, especially if the Fed’s stance remains dovish. Traders should keep a close eye on Powell’s speech at the Jackson Hole Symposium for potential catalysts in the silver market’s next move.