Silver prices extended their gains for the third consecutive day on Friday, trading around $38.70, up approximately 1.2%. The precious metal’s bullish momentum came as markets digested Federal Reserve (Fed) Chair Jerome Powell’s remarks at the Jackson Hole Economic Symposium, which were widely interpreted as dovish and supportive of a potential monetary policy easing in the near term.
The rally reflects a combination of trader repositioning, heightened risk-off sentiment, and renewed demand for safe-haven assets amid macro-financial uncertainty. Arthur Jones, a Primeber Group broker, guides readers through this subject with an accessible breakdown.
Silver (XAG/USD) rebounded sharply from an intraday low of $37.70, climbing to trade near $38.70, marking a 1.40% gain on the day. The move came as traders recalibrated their positions following Powell’s address, which underscored a cautious but flexible stance on monetary policy.
Markets responded positively to the notion that the Fed is ready to act to sustain economic growth while remaining vigilant against persistent inflation pressures.
Powell highlighted that the US economy is navigating a shifting risk landscape, with slower job growth and tariff-induced inflation pressures influencing the Fed’s dual mandate of price stability and maximum employment. Notably, nonfarm payroll growth slowed sharply to just 35,000 per month over the past three months, while US GDP growth cooled to 1.2% in the first half of the year.
Meanwhile, higher tariffs have contributed to an uptick in core PCE inflation, which ran at 2.9% in July. Powell emphasized that although some of these inflationary pressures may be transitory, the Fed will not allow a one-time price spike to evolve into an ongoing inflation problem, reinforcing the central bank’s cautious policy stance.
Market participants quickly interpreted the speech as tilting dovish, signaling the potential for a near-term interest rate cut. Following Powell’s remarks, the CME FedWatch Tool showed a 90% probability of a 25-basis-point rate cut in September, up from about 70% earlier in the day.
This repricing of Fed policy expectations contributed to a weaker US Dollar, providing a supportive environment for precious metals, including silver, which tends to benefit from currency depreciation and inflation hedging demand.
Technically, silver’s bullish momentum is evident as it holds comfortably above the $38.00 handle, with immediate resistance seen near $38.80–$39.00. A sustained break above this level could pave the way for a test of the $39.50–$40.00 range, while support remains at $37.50.
The recent rebound underscores silver’s role as a hedge against slower economic growth, lingering inflation risk, and potential financial market volatility.
From a macro perspective, Powell’s remarks indicate that the Fed is adopting a balanced approach to its dual mandate, remaining data-dependent while acknowledging downside risks to the labor market and upside risks to inflation. The central bank’s flexibility has been interpreted as dovish by markets, increasing the attractiveness of precious metals for traders seeking portfolio protection amid uncertainty in growth and inflation trajectories.
Silver’s rally also reflects its sensitivity to monetary policy expectations and currency movements. With the US Dollar weakening post-Powell’s comments, silver becomes relatively cheaper for non-US buyers, supporting additional demand.
Moreover, the risk-off environment amid concerns about global trade tensions, slower US economic activity, and tariff-driven price pressures continues to make silver an appealing safe-haven asset.
Trading strategies in this environment may focus on momentum plays near key technical levels, while closely monitoring macroeconomic indicators such as employment reports, GDP data, and inflation metrics, all of which could influence the Fed’s next moves.
Short-term traders might consider long positions above $38.70, targeting the $39.50–$40.00 zone, with stop-loss orders near $37.50 to manage downside risk. Longer-term investors may continue to view silver as a strategic hedge against uncertain growth prospects and monetary easing expectations.
Overall, the combination of dovish Fed signals, slowing labor market growth, and tariff-induced inflation pressures has created a favorable environment for silver. The metal’s ability to extend gains for three consecutive sessions, alongside the repricing of rate-cut expectations, highlights the interplay between monetary policy, currency fluctuations, and precious metal markets.
As market participants continue to assess Powell’s remarks and upcoming economic releases, silver is likely to remain in focus as a leading indicator of market sentiment regarding growth and inflation risks. With technical support at $37.50 and resistance near $38.80–$39.00, the market is positioned for potential further upside, while the broader macro backdrop supports silver’s bullish narrative.
In conclusion, the recent silver rally demonstrates how central bank communications, monetary policy expectations, and economic fundamentals converge to drive market positioning. Traders and investors are closely watching both technical levels and macro indicators, with silver increasingly seen as a hedge against uncertainty, a barometer for Fed policy expectations, and a core component of diversified portfolios in a volatile economic environment.
