Silver (XAG) Forecast: Fails to Confirm Gold’s Breakout—Resistance at $35.40 Holding

Divergence in Precious Metals: Silver Lags Despite Record Gold Rally

Silver prices are softening even as gold charges to new record highs, highlighting a notable divergence between the two metals that often move in tandem. While gold surged past $3149 on safe-haven flows, silver is struggling to clear resistance, weighed by technical headwinds and potentially weaker industrial demand signals.

At 11:57 GMT, XAG/USD is trading $33.86, down $0.23 or -0.68%.

Gold’s Rally Driven by Tariffs and Geopolitical Risk

Gold’s upside has been fueled by growing geopolitical unease and anticipation of new U.S. tariffs. Markets are positioning defensively ahead of President Trump’s expected announcement on reciprocal tariffs, adding a fresh layer of uncertainty. In parallel, increasing volatility around U.S.-Russia and Middle East tensions is pushing funds toward safe assets.

Additional support comes from expectations of looser monetary policy. Goldman Sachs recently raised the probability of a U.S. recession to 35%, citing prospects for more Federal Reserve rate cuts. Central banks have remained steady buyers of gold since 2022, while ETF inflows show retail and institutional investors are also adding exposure. This multi-pronged support has helped gold extend its rally by over $150 in a matter of sessions.

Silver Struggles to Break Out

Silver, by contrast, is failing to follow gold’s lead. The market is facing resistance at $34.59 and a more significant ceiling between $34.87 and $35.40. Monday’s bounce off $33.625 offered temporary relief, but traders remain cautious. A break below this minor support could accelerate losses toward the 50-day moving average at $32.43.

This underperformance may be tied to weaker industrial signals out of China—a key demand center for silver—and a lack of buying interest from central banks, which have concentrated allocations heavily in gold. Unlike gold, silver lacks the same safe-haven cachet and remains vulnerable to swings in global manufacturing sentiment.

Market Forecast: Gold Bullish, Silver Range-Bound with Downside Risk

Gold’s short-term setup remains bullish, but overbought technicals could lead to a consolidation or pullback, with strong support near $2999. Silver, however, appears range-bound and vulnerable. Failure to hold above $33.625 opens the door to a steeper correction. Until macro drivers improve or silver breaks out above $35.40, traders may continue to favor gold over silver for directional exposure.

More Information in our Economic Calendar.