Silver (XAG/USD) extends gains for a fifth consecutive session on Thursday, trading around $54.00 per troy ounce in early European hours and approaching its all-time high of $54.86 set on October 16.
The metal remains supported by lingering uncertainty over the United States (US) economic outlook, though improved risk sentiment following the end of the US government shutdown has capped further upside momentum.
Market mood improves as us government resumes operations
Investor sentiment brightened after US President Donald Trump signed the funding bill to officially end the record 43-day government shutdown, allowing federal operations to resume. The bill also includes provisions for direct healthcare-related payments to individuals, boosting optimism around fiscal stability.
While the reopening lifted overall market confidence, it has reduced near-term demand for safe-haven assets such as Silver. However, broader economic concerns including the potential impact of the shutdown on growth continue to lend the metal a degree of underlying support.
Fed outlook keeps traders cautious
Weak private labor data for October added to expectations that the Federal Reserve (Fed) may move toward further policy easing. The ADP Employment Change report earlier this week showed an average job loss of 11,250 in the four weeks ending October 25, underscoring labor market weakness.
However, hawkish remarks from Fed officials have tempered rate-cut expectations. The CME FedWatch Tool now reflects a 60% chance of a 25-basis-point rate cut in December, down from 67% previously. Atlanta Fed President Raphael Bostic warned that cutting rates prematurely could “feed the inflation beast,” while noting that labor market conditions remain resilient.
Technical outlook: xag/usd eyes retest of record highs
From a technical standpoint, XAG/USD maintains a constructive bias above key short-term moving averages. A sustained break above $54.20 could open the door for a retest of the record high at $54.86, with a further extension toward $55.50 possible if bullish momentum persists.
On the downside, immediate support lies near $53.50, followed by $52.70. A decisive drop below these levels would signal fading bullish momentum and could expose the next key level at $51.90.
Overall, Silver remains underpinned by dovish Fed expectations and a cautious macro backdrop, though improved risk sentiment may limit near-term gains.
