Silver (XAG) Forecast: Industrial Demand Holds as Gold Weakens and Dollar Firms

Silver Eases as Safe-Haven Demand Softens, But Industrial Support Holds Ground

Silver prices dipped at the start of the week, slipping from last week’s high of $33.70 as profit-taking and an improving geopolitical tone trimmed investor appetite for defensive assets. The metal is now trading near a critical support zone, with the broader focus shifting to upcoming U.S. data and macro signals from China.

At 12:41 GMT, XAG/USD is trading $33.49, up $0.33 or +0.99%.

Stronger Dollar and Trade Developments Pressure Prices

The U.S. dollar index firmed by 0.3%, making dollar-denominated commodities like silver more expensive for overseas buyers. A stronger greenback often acts as a headwind for metals, particularly when accompanied by waning geopolitical risk.

Over the weekend, China moved to exempt some U.S. imports from tariffs, and U.S. officials struck a more conciliatory tone on trade negotiations. Though Beijing denied active talks, the broader market viewed the rhetoric as de-escalatory—cooling the urgency for safe-haven metals.

Gold’s Pullback Weighs on Sentiment

Gold’s recent weakness—driven by the same trade optimism and stronger dollar—has spilled over into silver. With gold failing to hold key support at $3,228 and trending toward its 50-day moving average near $3,067, silver has lost a critical tailwind. Traders often look to gold as a sentiment barometer for broader precious metals direction, and its bearish near-term setup has added to caution across the silver market.

Technical Breakdown Risk Looms

Technically, silver faces a make-or-break moment at the 50-day moving average of $32.65. If this level fails, traders are watching the $32.19–$32.08 area as the next potential support band. A sustained move below $32.08 opens the door to $31.45, where dip buyers may emerge. To regain upward momentum, bulls need to push prices back above $33.70, with $34.59–$34.87 as the next upside targets.

Industrial Demand Offers Fundamental Support

Silver continues to benefit from its role in key industrial sectors, particularly in clean energy and electronics. Demand from photovoltaic manufacturing remains strong, with China and India leading global solar deployment. Silver’s use in electric vehicles, power electronics, and semiconductors adds structural support that differentiates it from gold. Over 50% of silver demand now comes from industrial applications—a major stabilizer in the face of macro pressure.

Market Outlook: Downside Risk Near-Term, Supportive Base Building

Silver’s short-term outlook tilts bearish unless the $32.65 level holds. A break lower could lead to a pullback toward $31.45. However, robust industrial demand, especially from Asia’s green tech and manufacturing sectors, should help limit deeper declines. Any confirmation of stronger physical buying or positive U.S. data surprises could help the market base out and re-engage higher levels.

More Information in our Economic Calendar.