Silver (XAG) Forecast: Outlook Turns Bearish as Dollar Strength Threatens 50-Day MA Support

Silver Dips as Traders Watch Industrial Demand and Tariff Developments

Silver prices edged lower on Monday, pulling back from last week’s peak at $33.70, as traders booked profits and reassessed external market forces. Pressure mounted after the metal briefly respected key technical support at the 50-day moving average of $32.65, a level now critical for maintaining the intermediate uptrend.

At 12:40 GMT, XAG/USD is trading $33.05, down $0.05 or -0.15%.

U.S.-China Trade Developments Ease Safe-Haven Demand

The easing of trade tensions between the United States and China reduced the urgency for safe-haven assets like silver and gold. Over the weekend, Washington and Beijing softened their tariff rhetoric, with China exempting select U.S. imports from heavy tariffs. Though official Chinese sources denied new trade talks, the market interpreted these moves as steps toward de-escalation, reinforcing a firmer U.S. dollar. This dollar strength, up 0.3% on the day, further trimmed silver’s appeal for foreign buyers.

Technical Pressure Builds on Silver Prices

With momentum stalling, silver faces critical technical tests. If the 50-day moving average at $32.65 gives way, expect selling to accelerate toward the $32.19–$32.08 zone. A breakdown below $32.08 would expose the market to a potential drop to $31.45, a deeper support that could attract value buyers. On the upside, reclaiming $33.70 would signal a bullish breakout, setting the stage for a run toward $34.59–$34.87.

Gold Weakness Adds to Headwinds

Gold’s parallel retreat — losing over 1% on Monday — added indirect pressure on silver. Gold faced its own technical tests below $3,300 as a robust dollar and easing geopolitical risks trimmed investor demand. With gold flirting with key moving averages and awaiting U.S. economic reports later this week, silver traders remain cautious about any strong directional bets.

Market Forecast: Silver Faces Short-Term Downside Risk

Silver’s short-term outlook skews slightly bearish unless the market can hold above $32.65. A sustained breach of this level would likely drag prices toward $32.08 or even $31.45. However, resilient industrial demand from China and continued global macro uncertainty could limit downside and potentially set the stage for renewed strength if support holds. Traders should stay alert to tariff developments and upcoming U.S. economic data for cues.

More Information in our Economic Calendar.