Silver Price Forecast: XAG/USD climbs to near $113.50 on safe-haven appeal

NEW YORK (January 27) Silver price (XAG/USD) surges to near $113.50 during the Asian session on Wednesday. The rally of the white metal is bolstered by economic and geopolitical risks, and interest rate cut expectations. The US Federal Reserve (Fed) interest rate decision will be in the spotlight later on Wednesday.

US President Donald Trump said on Tuesday that the value of the US ‌Dollar (USD) is great when asked whether he thought it had declined too much. Losses in the US Dollar Index accelerated after Trump's comments, hitting the lowest since February 2022. This, in turn, provides some support to the USD-denominated commodity assets such as Silver. 

Concerns over the Fed’s independence could boost the safe-haven demand, benefiting silver. Trump stated that he would soon announce his pick for the next Fed chair to replace Chair Jerome when his term expires in May. Betting markets pegged BlackRock Executive Rick Rieder as the front-runner, according to Reuters.

The Fed is widely expected to hold interest rates steady at its policy meeting on Wednesday, following three consecutive cuts at the end of 2025. Traders will closely watch the press conference as it might offer some hints about the US economic outlook and interest rate path.

The probability of a next rate reduction is largely priced in for the second half of 2026, most likely in June. Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal.

On the other hand, profit-taking in Silver cannot be ruled out in the near term after a rise of more than 200% year-on-year. “I think silver will put in a high this year to last for years. When price shifts at such high velocity, deficits reverse,” said Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence.

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