Silver (XAG/USD) extended its rally to near $72.70 during early European trading on Wednesday, supported by persistent dovish expectations for the US Federal Reserve (Fed) in 2026. The white metal continues to attract investors despite stronger-than-expected US Q3 GDP data, reflecting confidence in future rate cuts.
According to the CME FedWatch tool, traders assign a 70.6% probability that the Fed will cut interest rates by at least 50 basis points in 2026, exceeding the pace suggested in last week’s Fed dot plot. Policymakers collectively project the Federal Funds Rate to reach 3.4% by the end of 2026, implying no more than a single rate reduction. Lower rates generally support non-yielding assets like Silver, enhancing its appeal.
US GDP data released on Tuesday showed annualized growth of 4.3% in Q3, higher than the expected 3.3% and following 3.8% in Q2. Despite the strong macro reading, market participants remain focused on monetary policy expectations, keeping Silver’s bullish momentum intact.
Key market focus
In Wednesday’s session, traders will watch the US Initial Jobless Claims report, scheduled for 13:30 GMT. Economists expect first-time claims to remain steady at 223,000, providing additional insight into labor market dynamics and potential Fed policy guidance.
Technical outlook: bullish but overbought
On the daily chart, XAG/USD trades near $72.19, maintaining a firm bullish bias. Price remains above the ascending 20-day exponential moving average (EMA), which continues to provide dynamic support for the ongoing uptrend.
The 14-day Relative Strength Index (RSI) at 80.95 signals overbought conditions, suggesting that momentum may be stretched and a period of consolidation could follow. Short-term pullbacks may find support near the 20-day EMA around $63.07, which would keep the longer-term uptrend intact. A sustained break below this level could trigger a deeper retracement as overbought pressures unwind.
Overall, Silver remains in a strong bullish trajectory, supported by dovish Fed expectations and favorable technical positioning, but traders should monitor for potential consolidation in the near term.
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