Silver Price Outlook: XAG/USD surges toward $73.00 amid expectations of US rate reductions and increased safe-haven interest

Silver Prices Climb Amid Economic and Geopolitical Factors

Silver (XAG/USD) saw renewed buying interest near $72.90 during Friday's Asian session. In 2025, the precious metal surged by over 140%, marking its most significant annual gain since 1979. This impressive performance is largely attributed to expectations of additional US Federal Reserve rate reductions in 2026, as well as heightened demand for safe-haven assets amid ongoing global uncertainties.

Anticipation of further rate cuts by the Fed has put downward pressure on the US Dollar (USD), which in turn has lent support to silver prices, as the commodity is priced in USD. Currently, markets are factoring in two possible quarter-point rate cuts from the Fed this year. Lower interest rates tend to make non-yielding assets like silver more attractive by reducing their opportunity cost.

Silver’s upward momentum is also being fueled by increased purchases from central banks and investors seeking refuge in safe-haven assets, driven by persistent concerns over worldwide tensions and economic instability.

“Gold and silver are both benefiting from a combination of economic, investment, and geopolitical influences,” commented Rania Gule of trading platform XS.com.

Despite these supportive factors, silver’s near-term gains could face headwinds from profit-taking and portfolio adjustments. The Chicago Mercantile Exchange (CME) Group, a major global commodities exchange, recently announced another increase in margin requirements for gold, silver, platinum, and palladium contracts. This change means traders will need to allocate more capital to cover potential risks when taking delivery of these contracts, which may temper further advances in silver prices.