Silver price prediction: XAG/USD to reclaim $51 record high after Fed dovish tone

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10.10.2025

Silver price prediction: XAG/USD to reclaim $51 record high after Fed dovish tone — Silver holds record highs despite profit-taking

Silver [XAG/USD] extended its record-breaking momentum on Friday, advancing sharply in the European session to trade near $51. The surge followed renewed buying interest after Thursday’s pullback failed to attract sustained selling pressure. Price strength was reinforced by the Federal Reserve Minutes released late Thursday, which showed policymakers agreeing to support a weakening labour market. That hint of softer policy triggered demand for precious metals, as traders interpreted it as a sign of upcoming rate cuts. Silver’s renewed strength marks a 4% daily gain and extends its week-to-date advance to more than 6%.

- Silver extends eight-week rally near $51 as Fed Minutes boost rate cut bets.

- Dollar strength fails to curb silver’s rise, showing momentum driven by policy expectations.

- Institutional volume surge confirms strong conviction behind silver’s sustained upward trajectory this week.

Thursday’s session was most historic. Silver touched a new all-time high at $51 during early North American trading, surpassing the 2011 record of $50. The rally drew heavy profit-taking immediately after the peak, causing price to retrace to $48.5. The reaction was not purely technical—reports of a permanent ceasefire agreement between Israel and Hamas eased geopolitical tension, prompting traders to lock in profits on safe-haven positions. The selloff, however, was met by strong buying near the 100 EMA on the 1-hour chart, cushioning the decline and restoring the bullish intraday structure. Silver closed Thursday slightly higher near $49.3, confirming the correction as shallow and controlled rather than a reversal.

Silver price dynamics (Jan - Oct 2025). Source: Tradingview

The rebound gained traction as the Fed’s dovish tone reignited appetite for non-yielding assets. Dollar strength earlier in the week had failed to suppress silver’s advance, showing that momentum is now driven more by rate expectations than by traditional currency correlation. Traders appear to be shifting focus toward inflation resilience and growth concerns rather than yield advantage, which strengthens silver’s relative appeal.

Traders eye Michigan inflation data for next catalyst in silver’s record advance

Trading volume on Thursday was the highest daily turnover since April, underscoring institutional participation behind the rally. Silver’s eight-week winning streak has lifted the month-to-date performance to nearly 10% within the first ten trading days. The combination of macro optimism, easing policy expectations, and solid technical structure continues to fuel bullish conviction.

Market attention now turns to U.S. Preliminary University of Michigan data on Inflation Expectations and Consumer Sentiment. Strong inflation expectations could amplify demand for inflation hedges, while a firm consumer sentiment reading may stabilise risk appetite. Either way, silver’s ability to hold near record territory signals that buyers are still in control, setting the stage for another potential test of $51 in the sessions ahead.

Recently, we discussed silver regaining strength to trade near $49 ahead of the key FOMC release. RSI and higher lows confirmed bullish control as dollar weakness and safe-haven flows reinforced the rally.

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