Silver Price Forecast: XAG/USD gains above $57.50 as Fed rate hike bets decrease

Silver price (XAG/USD) gains ground after posting losses in the previous day, trading around $57.60 per troy ounce during Asian hours on Monday. Silver climbed amid fading expectations for a Federal Reserve (Fed) rate hike in October.

Market sentiment shifted after Fed Chairman Kevin Warsh spoke at an International Monetary Fund event on Friday, stating that he does not prejudge interest-rate decisions and offering no clear indication of whether the central bank will raise or hold short-term rates at its upcoming October 27–28 meeting.

Market expectations for a rate increase have dropped significantly. According to the CME FedWatch Tool, traders are now pricing in nearly an 83.9% probability that the Fed will keep interest rates unchanged later this month, a sharp rise from the 49% chance priced in just a month earlier.

Safe-haven demand further supported precious metals as rising anxieties around AI-related investments sparked a broader stock market selloff and dragged bond yields down. Rabobank observes that recent market turbulence has been particularly acute in the AI complex, noting that “AI-related stocks have had a tough few days.” At the same time, stress has also surfaced in associated credit markets. The bank notes that “CoreWeave’s bonds made headlines for not exactly the best reasons” and adds that, according to the Financial Times, investors are now “dumping data centre bonds” more broadly, underscoring how quickly sentiment has soured across this previously favoured theme.