Silver (XAG) Forecast: Downside Risks Emerge as Selling Pressure Increases

Silver Prices Edge Lower as Key Technical Levels Come into Focus

Silver prices started the week lower on Monday, trading below a pivot at $30.54 and hovering around the 50-day moving average (MA) at $30.39. The market is showing signs of weakness, with traders closely watching these levels for potential shifts in momentum.

A decisive break back above the 50-day MA and the $30.54 pivot would signal renewed buying interest. Such a move could trigger an advance toward the resistance level at $30.98. Beyond this point, momentum could accelerate, potentially targeting $31.81.

Conversely, a failure to hold the 50-day MA as support could extend selling pressure. The next key levels to watch include the 200-day MA at $30.07 and another pivot at $29.86, where bearish momentum could intensify further.

At 15:34 GMT, XAG/USD is trading $30.31, down $0.29 or – 0.94%.

Gold Holds Steady Amid Fed Policy and Dollar Moves

Gold, often viewed as a counterpart to silver, also traded lower on Monday, holding just below its record high of $2,790.17. Market sentiment remains largely bullish, with traders eyeing the psychologically significant $3,000 level. Spot gold saw support as the U.S. dollar softened, falling 0.2% and making the metal more attractive to international buyers.

Geopolitical risks, inflation concerns, and expectations for a steady Federal Reserve policy continue to underpin gold’s safe-haven appeal. Meanwhile, U.S. Treasury yields fell, further reducing the dollar’s attractiveness and lending additional support to precious metals.

Industrial Demand and Energy Policy Impact on Silver

Beyond technical factors, silver’s industrial demand, particularly in China and the solar energy sector, remains a focal point. China’s economic growth concerns and President Trump’s tariffs on solar technology could weigh on demand. Additionally, uncertainty surrounding energy policies could impact long-term usage of silver in green technologies, introducing another layer of volatility.

Short-Term Market Outlook

Silver’s price movements will remain tightly linked to key technical levels and broader macroeconomic signals. If buyers regain control above $30.54, silver could see a short-term rally toward $31.00 or higher. However, a break below the 50-day MA may trigger deeper losses to $29.86 or lower.

Gold’s stable outlook suggests that silver could also find support from safe-haven demand, especially if the dollar weakens further. This week’s Federal Reserve meeting and inflation data will play a pivotal role in shaping the direction of both gold and silver markets.

More Information in our Economic Calendar.