Silver (XAG) Forecast: Price Struggles at $31.81—Rebound or More Selling Ahead?

Silver Prices Struggle for Momentum

Silver prices remained flat on Wednesday, holding near the critical 50% retracement level at $31.81. This follows a sharp 1.88% drop on Tuesday, signaling potential indecision in the market.

A decisive move below $31.81 could trigger accelerated selling, targeting the 50-day moving average at $30.87 and possibly the 200-day moving average at $30.51.

Conversely, reclaiming $31.81 might spark a rebound towards the 61.8% retracement level at $32.53, providing a potential short-term buying opportunity​.

At 13:34 GMT, XAG/USD is trading $31.86, up $0.003 or +0.01%.

Trump’s Tariff Policies Weigh on Industrial Demand

The silver market is grappling with uncertainty tied to U.S. President Donald Trump’s tariff policies. His recent investigation into new copper tariffs has heightened inflation concerns, which traditionally support precious metals.

However, silver’s dual role as both a safe-haven and an industrial metal adds complexity. While gold might benefit from safe-haven demand, silver could face pressure if tariffs dampen industrial activity. Traders are cautious, balancing silver’s appeal as a hedge against inflation with its vulnerability to a potential slowdown in industrial demand​.

Gold’s Performance Influences Silver Sentiment

Gold’s recent price action is also shaping sentiment in the silver market. After a sharp 2% drop on Tuesday, gold steadied on Wednesday, maintaining a broadly bullish trend. A potential breakout above $2,956.31 could lift silver, as traders often view silver as a cheaper alternative to gold. However, if gold fails to gain traction, silver might remain under pressure, especially if industrial demand weakens amid tariff and economic concerns​​.

Economic Data Could Be a Game Changer

Upcoming U.S. economic data, including Friday’s Personal Consumption Expenditures (PCE) report, could provide fresh direction for silver prices. Inflation pressures and potential shifts in Federal Reserve policy might impact silver’s industrial demand outlook.

With rising Treasury yields and mixed economic indicators—such as weak consumer confidence and soft housing data—traders are on alert for signals that could influence silver’s balance between safe-haven and industrial market forces​​.

Market Forecast: Silver at a Pivotal Juncture

Silver’s ability to hold the $31.81 level will be critical in the coming days. A break lower could lead to further selling, while a rebound might create a tactical buying opportunity.

Given the uncertainty around U.S. trade policies and key economic data, silver traders should remain agile, closely monitoring the metal’s dual influences of safe-haven demand and industrial use.

Gold’s performance will also serve as a valuable sentiment gauge, but silver’s path forward will largely hinge on trade developments and economic signals​.

More Information in our Economic Calendar.