On Thursday, August 7, silver broke through the short-term pivot at $37.87, establishing a new base of support. This breakout, following several failed attempts to test resistance, signals a renewed bullish momentum. A break above this level could potentially challenge long-term resistance at $39.53, a 14-year high. A break below $37.87 would place downside risk at the 50-day moving average at $36.90, with minor support at $36.21.



Fed Rate Cut Probability Soars – What It Means for Silver

According to the Chicago Mercantile Exchange (CME) FedWatch tool, the market now sees a 93% probability of a Federal Reserve rate cut in September, a significant increase from 48% last week. The catalysts for this are dovish rhetoric from key Fed figures and signs of economic pressure, particularly following President Trump's announcement of sweeping tariffs, including tariffs ranging from 10% to 50% on various countries and a 100% tariff on non-US-produced semiconductors.

This aggressive trade stance has weighed on the U.S. dollar, sending the U.S. dollar index (DXY) to a 1.5-week low of 98.00. As a non-yielding asset denominated in U.S. dollars, silver tends to benefit from falling yields and a weaker dollar, making it attractive to global buyers.

Gold's rise provides strong momentum for silver

Gold surged to $3,397.58, driven by safe-haven demand and dovish central bank stances, indirectly providing momentum for silver. When gold held above its 50-day moving average at $3,347.60, silver benefited from overflow buying by traders seeking relative value. Furthermore, if lower interest rates ultimately stimulate production, silver's industrial attributes could also provide support, maintaining resilient demand for the metal.

Silver Price Forecast: Focus on $39.53, support at $37.87


(Source of spot silver daily chart: Yihuitong)

As long as silver holds above $37.87, the overall bias remains to the upside, with momentum likely to push it to test $39.53. However, failure to hold this level could send the price down to $36.90, where the 50-day moving average acts as the next technical support level.

Silver remains supported amid a dovish Federal Reserve and geopolitical tensions fueling risk aversion, but the path to the upside depends on whether it can hold the key pivot point of $37.87.

Traders should be wary of any daily close below the 50-day moving average, which could be an early sign of rally exhaustion. Until then, pullbacks remain buying opportunities within this bullish structure.

At 19:59 Beijing time, spot silver was quoted at $38.315 per ounce, up 1.35%.