Analysis of the rapid rise background: Expectation of policy easing and technical strength, scenario ignition upon breaking $54.50

Trading Checklist: Current Technical Position of Silver

XAG/USD, trading near $51.94 per ounce, remains above the 20-day exponential moving average (EMA), signaling a short-term bullish trend. The Relative Strength Index (RSI) is at 59.15, above the 50 level but below the overbought threshold of 70, indicating room for additional buying.

Support levels are identified in three stages. The primary support is around $50.40, where the 20-day EMA is located. The second support is at $44.47, the recent high on September 23. The resistance level is at an all-time high of $54.50, approximately $2.5 above the current price. If the downward trend in the 20-year Treasury yield continues, the likelihood of breaking through this resistance increases.

Federal Reserve Policy Signal: Probability of December Rate Cut Jumps to 85.3%

Market expectations have shifted significantly. According to CME FedWatch data, the probability of the Fed cutting the benchmark interest rate by 25 basis points at the December meeting has risen from 50.1% a week ago to 85.3%. This would lower the rate to the 3.50–3.75% range.

This rapid change stems from recent comments by New York Fed President John Williams. He stated, “While current monetary policy remains restrictive, recent measures have eased the tightening, and there is room for further policy adjustments in the short term.” Although not a direct signal of an additional cut, markets interpret this positively.

The current 10-year US Treasury yield hovers around 4.00%, down approximately 3.4% week-over-week. The 20-year Treasury yield follows a similar trend, indicating a broad decline in long-term interest rates. Falling Treasury yields reduce the opportunity cost of holding non-yielding assets like silver, creating a favorable environment for buying.

Political Variables: Fed Chair Succession and Pressure to End High-Interest Policies Early

Uncertainty in economic policy also supports silver’s strength. According to Bloomberg, Kevin Hasset, a former White House economic advisor, is being considered as a potential successor to Jerome Powell as Fed Chair. If allies of former President Donald Trump join the Federal Open Market Committee (FOMC), there is speculation that this could pressure for an early termination of high-interest rate policies.

If this scenario materializes, it could accelerate the easing cycle, extending the bullish period for physical assets including silver.

Market Trend: Up for Three Consecutive Trading Days, Approaching $52

In Wednesday’s Asian session, silver rose near $52 per ounce, continuing a three-day rally. This suggests that macroeconomic and political factors are simultaneously aligning, shifting market sentiment toward risk-on.

Trading Scenarios: Layout and Conditional Strategies

Bullish Scenario
As long as RSI remains below 70 and the daily close stays above the 20-day EMA, the short-term outlook is bullish. Breaking through the $54.50 resistance could lead to a new all-time high.

Bearish Scenario
If RSI declines toward the 50 level or the price drops below the 20-day EMA, upward momentum may weaken, and the market could enter a sideways consolidation. In this case, whether the $50.40 support holds will be critical.

Current converging macro signals—rising expectations of Fed rate cuts, falling Treasury yields, and easing political pressures—coupled with technical strength, make a scenario of breaking through $54.50 plausible.