Silver (XAG) Forecast: Facing Triple Threat – China Tariffs, Solar Cuts, and Technical Breakdown

Where Are Key Support Levels Breaking Down?

Silver prices are testing critical support at the 50-day moving average ($30.39), with sellers pushing below the key pivot at $30.53. The failure to breach resistance at $30.98 signals potential weakness ahead, despite gold’s recent strength. A breakdown below the 200-day moving average at $30.05 could accelerate selling pressure toward $29.86, triggering a potentially significant bearish move.

At 13:13 GMT, XAG/USD is trading $30.26, down $0.56 or -1.83%.

Why Is Investment Capital Flowing Elsewhere?

Investment capital appears to be bypassing silver in favor of gold, cryptocurrencies, and equities. This notable divergence from gold’s rally exposes potential liquidity challenges in the silver market, suggesting limited buying interest at current levels. Market participants are increasingly seeking alternative assets, leaving silver vulnerable to further downside pressure as institutional support wanes.

Can Industrial Demand Withstand Growing Pressures?

Chinese tariff uncertainties are weighing heavily on silver’s industrial prospects, given China’s dominant role as a major buyer. Further pressure looms from potential cuts to solar energy project funding under the Trump administration, threatening a crucial demand source for the metal. The combination of trade tensions and policy risks creates significant headwinds for silver’s industrial consumption outlook.

Is Gold’s Technical Strength Masking Market Vulnerabilities?

While gold trades near its all-time high of $2,790.17, warning signs are emerging. The RSI reading of 67 approaches overbought territory, and traders are reducing positions ahead of next week’s Federal Reserve meeting. Support at $2,693.40 becomes vital if profit-taking accelerates. This technical setup could spill over into silver markets, potentially amplifying existing selling pressure.

What’s Next for Silver Traders?

Silver faces immediate downside risk with multiple technical support levels under pressure. The 200-day moving average at $30.05 represents a critical threshold – a breakdown could trigger increased selling momentum and force long positions to liquidate.

However, potential upside exists above $30.98, with room to extend toward $31.81 if buying interest returns. Traders should monitor gold’s technical signals and upcoming Fed policy decisions for directional cues, while keeping Chinese trade developments in focus for industrial demand implications.

The convergence of technical weakness, shifting investment flows, and industrial demand concerns suggests increased volatility ahead.

More Information in our Economic Calendar.