The Silver Price Forecast remains in focus as XAG/USD trades above $64 ahead of the Federal Reserve interest rate decision on Wednesday, with investors preparing for potential volatility across precious metals.
Silver traded around $64.26 per ounce, up approximately 0.9%, after climbing as high as $64.93 during the session. The recovery follows a pullback earlier in September that pushed the precious metal away from the highs reached in late August.
The Federal Reserve will announce its interest rate decision at 2:00 p.m. ET (18:00 GMT). Markets broadly expect policymakers to raise the federal funds rate by 25 basis points to 3.75%-4.00%.
With a quarter-point increase largely priced in, the next move in the silver price could depend more on Fed Chair Kevin Warsh’s comments and the central bank’s outlook for additional rate increases than on the decision itself.
Why Is the Silver Price Rising?
The silver price is rising as XAG/USD rebounds from recent losses, helped by a modest pullback in US Treasury yields ahead of the Fed announcement. Silver reached an intraday high near $64.93 after opening around $63.67, bringing the psychologically important $65 level back into view.
The rebound comes despite a difficult backdrop for precious metals. Expectations for tighter US monetary policy have pushed Treasury yields sharply higher in September, increasing the opportunity cost of holding non-yielding assets such as silver and gold.
The benchmark 10-year US Treasury yield remains close to 5%, after recently reaching its highest level in almost two decades. Any sustained retreat in yields could provide additional support for XAG/USD. A renewed surge following the Fed decision, however, could quickly challenge Wednesday’s silver price recovery.
Fed Interest Rate Decision Puts Silver Price in Focus
The Federal Reserve interest rate decision is the main catalyst for silver on Wednesday. Markets widely expect a 25-basis-point rate hike, which would take the federal funds target range to 3.75%-4.00%. Recent US inflation data strengthened the case for tighter policy. August CPI showed that price pressures remained persistent, while the surge in energy prices has added another inflation risk for policymakers.
For silver, higher interest rates are generally a headwind because the metal does not provide a yield. Rising US rates can also strengthen Treasury yields and the US Dollar, both of which can weigh on dollar-denominated precious metals.
However, the expected hike itself may not determine the direction of XAG/USD. The more important question is whether the Fed indicates that additional interest rate hikes are likely before the end of 2026.
How Could the Fed Rate Hike Affect Silver?
A Fed rate hike is already widely expected, limiting the surprise value of a quarter-point increase by itself. The silver price reaction could instead depend on whether the Fed delivers a hawkish or less aggressive outlook for future policy. If policymakers signal that inflation remains a significant concern and additional rate increases are likely, Treasury yields could rise further. A stronger US Dollar and higher yields would create additional pressure on XAG/USD.
If the Fed raises rates but signals that further tightening will depend heavily on incoming economic data, yields could retreat as investors reduce expectations for subsequent hikes. That scenario could support silver. An unexpected decision to leave rates unchanged would represent a much larger surprise and could trigger a sharper reaction across the US Dollar, bonds, gold and silver.
Silver Price Forecast: Can XAG/USD Break Above $65?
The Silver Price Forecast remains neutral to cautiously bullish above $63, although XAG/USD still needs to clear $65 to strengthen the recovery. Silver is trading near $64.26, after reaching $64.93 earlier in the session. This places $65 as the immediate resistance level.
A sustained move above $65 could open the way toward $67, followed by the $68-$70 region that capped the previous advance. On the downside, $63 is the first support level to watch. A break below it could expose $62, while a deeper decline would bring the psychological $60 level back into focus.
Momentum remains mixed. The daily MACD line is below its signal line and the histogram remains negative, indicating that bullish momentum has weakened despite Wednesday’s rebound. For now, XAG/USD remains caught between support around $63 and resistance near $65. The Fed decision could provide the catalyst needed to break that range.
Silver Price Outlook for September 2026
The broader silver price outlook for September has become increasingly tied to US interest rate expectations. XAG/USD entered the month after a strong August rally but has since struggled to maintain momentum as Treasury yields climbed and markets increased bets on renewed Fed tightening.
At the same time, silver retains support from its dual role as a precious and industrial metal. Longer-term demand from solar energy, electronics and other industrial applications remains part of the fundamental silver outlook, although monetary policy is likely to dominate short-term price action around the Fed meeting.
The immediate battle is around $65. A break above that level accompanied by falling Treasury yields could improve the September silver outlook and bring $67-$68 back into focus. Failure to clear $65, particularly if yields rise after the Fed announcement, could keep XAG/USD under pressure toward $63-$62.
The Silver Price Forecast remains mixed ahead of the Federal Reserve decision, with XAG/USD trading above $64. A sustained break above $65 could strengthen the recovery, while a fall below $63 could expose $62 and potentially $60.
Markets widely expect the Federal Reserve to raise interest rates by 25 basis points to 3.75%-4.00%. Attention will therefore focus heavily on what policymakers signal about additional rate increases.
The silver price forecast for September remains sensitive to US interest rates and Treasury yields. Holding above $63 keeps the recovery intact, while a break above $65 could strengthen the case for a move toward $67-$68.
Silver is attempting to recover, but the short-term technical picture remains mixed. XAG/USD is holding above $64 but has yet to establish a sustained move above $65, while MACD momentum remains weak.