Silver (XAG) Forecast: Breakdown Under $31.29 Sets a Bearish Tone

What’s Pressuring Silver Prices Today?

Silver prices dropped 2% on Monday, slipping below a critical resistance level at $31.29 and the 50-day moving average at $31.80. The decline follows a strong five-session rally that lifted prices to a three-week high last week. Profit-taking and reactions to the nomination of Scott Bessent as U.S. Treasury Secretary are key factors behind the retreat.

Traders view $31.29 as a pivotal support level for determining the near-term trend. A break below this point could push silver lower toward $30.61, which may attract buyers. However, failure to hold at $30.61 could lead to a test of the recent low at $29.68. On the upside, overcoming $31.29 would indicate renewed strength, potentially driving prices toward the 50-day moving average and a retracement zone between $32.28 and $32.89.

How Is Market Sentiment Influencing Silver?

Profit-taking after last week’s strong rally is weighing on silver, which posted its best weekly gain in nearly two years. Meanwhile, Scott Bessent’s nomination as Treasury Secretary has reduced safe-haven demand. Bessent, a seasoned Wall Street figure, is seen as pro-business and less likely to pursue aggressive trade policies, easing fears of economic instability.

Bessent’s appointment has also bolstered equity markets, lowered bond yields, and weakened the dollar. Yields on 10-year Treasuries dipped to 4.343% from 4.412%, while the dollar index fell 0.8% to 107.22. However, Bessent’s preference for a strong dollar and gradual tariffs suggests the currency’s retreat may be short-lived.

Traders are also focused on the Federal Reserve’s upcoming FOMC minutes, GDP revisions, and October’s core PCE price index, the Fed’s preferred inflation gauge. These data points will influence expectations for a December rate cut, currently priced at a 56% probability by the CME FedWatch tool. Markets are also watching for signals on 2024 rate policy, with speculation that fewer cuts may be planned.

Where Could Silver Be Headed Next?

Silver’s outlook is mixed in the near term. A break below $31.29 could lead to further declines, with $30.61 providing key support. If this level fails, prices could test the recent low at $29.68. Conversely, a recovery above $31.29 and the 50-day moving average at $31.80 may trigger a rally toward the $32.28–$32.89 retracement zone.

Silver’s direction will largely depend on U.S. economic data and Federal Reserve signals this week. Traders should prepare for heightened volatility ahead of Thursday’s Thanksgiving holiday and shortened Friday session.

For a look at all of today’s economic events, check out our economic calendar.