Silver price forecast: XAG defies strong dollar, rallies ahead of Fed Chair speech

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Fed remarks to signal XAG/USD outlook

Highlights

Silver hits $66.5 before retreating as traders lock gains ahead of Fed commentary.
XAG/USD gains 17% monthly and 6% week-to-date, signaling strong Fed-rate-cut conviction.
Williams and Bostic comments today may trigger a new rally or profit-taking at the $70 zone.

The strength of this rally has come despite a conflicting backdrop. The U.S. labor market data showed resilience but also signs of cooling. The November non-farm payroll report added weight to the expectation that the Federal Reserve may move toward further interest rate cuts. This policy outlook typically weakens the dollar and supports metal prices. However, in a countermove, the dollar index bounced sharply from an eleven-day low to a four-day high, reflecting renewed short-term demand for the greenback.

Silver price dynamics (Nov - Dec 2025). Source: Tradingview

Interestingly, silver continued to rally even as the dollar gained. This signals that traders are placing stronger emphasis on the policy easing narrative rather than the temporary strength in the dollar. The current pullback in silver during the European session may be tied to that dollar rebound, but expectations of its short duration are keeping bullish bias intact. If the market’s conviction on additional Fed rate cuts holds, then silver could regain momentum toward higher levels.

Silver weekly gains at risk if Fed commentary stalls rate-cut conviction

Technically, the 1-hour 20 EMA has now climbed above last week’s peak and is currently positioned around the $65 mark. This level may now act as a short-term support and could offer buyers a base if the price attempts another leg higher. Silver has already gained more than 6% on the week and 17% so far this month. If current market gains are maintained, this would be the largest monthly gain since June of the previous year.

The rally also positions silver for a fourth consecutive weekly gain and an eighth consecutive monthly advance. These gains may either hold or extend based on guidance from upcoming Fed comments. Later today, traders will monitor remarks from New York Fed President John Williams and Atlanta Fed President Raphael Bostic. If their tone confirms the likelihood of more easing, silver may rally further toward the $70 threshold. Any hawkish tilt, however, could prompt additional short-term profit-taking.

We discussed how silver rebounded 1.5% intraday as buyers defended the 100 EMA support near $62.8. The supply zone between $63.9 and $64.64 capped silver upside pending when stronger volume returns.

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