Silver Price Forecast 2025: Opportunities After a Strong Start Despite Hurdles

Precious metal silver (XAG/USD) rises significantly at the beginning of 2025. During the European trading session, it gains 1.50% to approximately $29.40. This is due to a pause in the rapid upward movement of US Treasury yields, which had surged over 10% last month. The ten-year US Treasury notes are now at 4.55% – a decline that benefits silver directly. The reason lies in the economy: falling yields reduce the opportunity costs for interest-free assets like precious metals, making them more attractive to investors seeking alternatives to high-yield securities.

Technical Outlook: RSI turns upward

Looking at the chart structure, the silver price forecast 2025 appears technically interesting. The price approaches the 200-day moving average (EMA) at around $29.40. Notably, the 14-day Relative Strength Index (RSI) is moving back above the 40-point mark. If this indicator remains sustainably in this range, it could weaken the previous bearish sentiment. On the downside, the September low at $27.75 marks a critical support level, while the 50-day EMA at $30.90 represents immediate resistance.

However, the longer-term outlook remains uncertain. As long as the price stays below the upward trendline drawn from the February (Low: 22.30 US dollars), a cautious negative underlying trend persists.

Dollar dominance and central bank calculus

The US dollar index (DXY) remains stable at 108.50, near a two-year high. This resilience is fueled by expectations of robust US economic growth. Market participants anticipate that the Federal Reserve (Fed) will proceed more moderately in 2025 than previously forecasted. The focus is on the economic policy measures of the Trump administration: stricter immigration policies, higher import tariffs, and tax relief are intended to boost economic momentum. These factors support both the greenback and longer-term bond yields.

Fed schedule: Moderate rate cuts expected

Goldman Sachs forecasts that the Fed will cut interest rates by 25 basis points in March. Subsequent reductions in June and September could lower the policy rate to 3.50% to 3.75%. In 2024, the central bank has already cut three times, totaling 100 basis points, to the current level of 4.25% to 4.50%. Falling interest rates would put pressure on the dollar and give a boost to the silver price – provided the market follows this script.

Outlook: Dependent on Fed signals and economic data

The silver price forecast 2025 heavily depends on two factors: firstly, the future rate hikes or cuts by the Federal Reserve, and secondly, the persistence of economic recovery in the US. As long as bond yields remain under pressure and opportunity costs for precious metals decrease, silver benefits. Conversely, unexpectedly strong economic growth could lead the central bank to implement less aggressive rate cuts, supporting the dollar and putting pressure on the white metal.