Silver (XAG/USD) continues its upward momentum for the third straight session, trading near $50.90 per troy ounce during Tuesday’s Asian session. The precious metal remains supported by growing expectations of a Federal Reserve (Fed) rate cut in December amid signs of economic weakness in the United States (US), prompting investors to favor non-yielding assets like silver.
Fed rate cut expectations drive silver demand
Comments from Fed Governor Stephen Miran on Monday reinforced the market’s dovish outlook. Speaking to CNBC, Miran stated that inflation continues to ease and confirmed that the Fed should stay the course with rate reductions, suggesting a 50-basis-point (bps) cut in December or at least 25 bps. He also noted that the US economy is not operating at full employment and that recent data support further easing.
A slowdown in hiring and soft consumer sentiment have further bolstered the case for monetary loosening. October saw job losses concentrated in government and retail sectors, while the University of Michigan’s Consumer Sentiment Index fell to a three-and-a-half-year low in early November. According to the CME FedWatch tool, markets now price in a 62% probability of a 25-bps rate cut next month, keeping silver underpinned.
US shutdown resolution caps safe-haven appeal
Despite the supportive macro backdrop, silver’s upside may face near-term resistance as optimism grows over the end of the US government shutdown. The Senate passed a funding bill late Monday in a 60–40 vote, effectively concluding the 41-day standoff. The measure, which saw bipartisan support, now moves to the House of Representatives for approval.
US President Donald Trump has endorsed the deal, signaling that the government could reopen within days. Senate Majority Leader John Thune said he expects Trump to sign the bill once it passes Congress. The resolution of the shutdown could boost overall market sentiment, tempering safe-haven demand for precious metals such as silver.
Nonetheless, with the Fed expected to deliver policy easing and economic data pointing to a softening US outlook, the broader bias for XAG/USD remains tilted to the upside in the near term.
