Silver keeps climbing—XAG/USD is pushing toward $52, marking its third day in a row of gains. What’s driving this run? US Treasury yields are dropping, and traders are betting hard that the Fed’s going to cut rates again before the year wraps up.
Fed President John Williams Dropped a Hint
Right now, the 10-year Treasury yield is holding near 4%, which doesn’t sound too dramatic, but it’s slid 3.4% just over the past week. Lower yields make assets like silver—stuff that doesn’t pay interest—look a lot better, especially when rates are on the way down.
Traders have definitely caught on. The CME FedWatch tool now pegs the odds of a December 25-basis-point rate cut at just over 85%, a big jump from last week’s 50%. Plus, New York Fed President John Williams dropped a few dovish hints, saying monetary policy is still only “modestly restrictive.” That’s music to the bull’s ears.
Political Developments Add to Rate-Cut Bets
Politics is in the mix, too. Word is, White House advisor Kevin Hassett could end up replacing Jerome Powell as Fed Chair. Add in another Trump pick—Governor Stephen Miran—and you’ve got markets talking about even faster rate cuts if leadership changes. The dollar’s taking a hit, yields are slipping, and silver’s getting a tailwind.
Zooming in on the charts, silver is trading around $51.94, staying well above its 20-day EMA at $50.40. That’s a strong trend, and the RSI at 59.15 shows buyers are in charge without the market being overheated.
If this momentum holds, silver looks set to challenge its all-time high at $54.50. If things turn south, watch the 20-day EMA for the first line of support and then the September peak at $44.47.
