With Fed Move Priced In, Silver Bulls Await a Fresh Catalyst
LONDON (October 3) Spot silver is trading firmer Friday, holding above a key technical pivot at $46.93 as bulls aim for another run at the multi-year high at $48.06. The market is drawing support from growing confidence in near-term Federal Reserve rate cuts and a softening U.S. dollar, even as Treasury yields tick higher in response to a government data blackout.
With gold consolidating near record highs and Fed policy bets leaning dovish, silver is finding tailwinds from both monetary and technical angles.
Fed Rate Cut Expectations Drive Metals Bid
The U.S. government shutdown has delayed the release of crucial economic data, including the non-farm payrolls report, forcing markets to lean heavily on alternative indicators. The result: traders now fully price in a 25 basis point cut at the next Fed meeting, with CME FedWatch showing a 97% probability for October and 88% for December.
While Dallas Fed President Lorie Logan signaled a wait-and-see stance, she also reinforced that the last rate cut was proactive — leaving the door open for further easing if conditions weaken. This dovish tilt is lifting precious metals across the board.
Dollar Under Pressure, Yields Hold Steady
Daily US Dollar Index (DXY)
The U.S. dollar index is tracking its worst week since July, down 0.1% to 97.78.
Daily US Government Bonds 10-Year Yield
Meanwhile, Treasury yields are moving modestly higher with the 10-year at 4.092% and the 30-year near 4.691%. Higher yields would normally weigh on silver, but current price action suggests traders are betting the Fed will prioritize rate cuts over inflation containment.
The weaker dollar remains the dominant influence for metals this week, helping silver stay buoyant even in the face of firmer bond yields.
Gold’s Strength Reinforces Silver’s Momentum
Gold is on pace for its seventh straight weekly gain, currently up 2.6%, and consolidating just under the all-time high of $3897.13. If gold clears that level, the psychological $4000.00 handle could come into play.
The bullish tone in gold supports silver’s upward momentum, particularly with physical demand picking up in India and China still offline for the holiday.
The tight correlation between the metals means silver could surge in sympathy if gold breaks out.
Silver Forecast: Watch $46.93 Support, $48.06 Resistance
Daily Silver (XAG/USD)
As long as spot silver holds above $46.93, buyers remain in control. A break above $48.06 could trigger strong momentum buying, potentially targeting the next multi-year high at $49.81. On the flip side, a drop below $46.93 would likely expose the market to $45.81, with deeper support waiting in the $44.60–$44.22 zone.
For now, dips are being bought and the bias favors higher prices, especially if the Fed confirms the expected rate cut path next week. Traders should watch volume closely on any push through $48.06 — confirmation there could accelerate the move higher.
FXEmpire
