Silver (XAG) Forecast: Silver Market Drops as Dollar Strengthens – Is a Deeper Pullback Ahead?

Silver Under Pressure as Dollar Strength and Easing Trade Tensions Weigh

Silver prices slipped on Friday as easing U.S.-China trade tensions and a firmer U.S. dollar reduced safe-haven demand across the metals complex. After recent strong gains, silver is showing signs of stalling, with traders closely watching key technical levels for confirmation of a potential near-term top.

On Friday, XAG/USD settled at $33.10, down $0.48 or -1.43%.

China Trade Moves Dent Safe-Haven Appeal

China’s decision to grant tariff exemptions on critical U.S. imports sparked hopes of a cooling trade conflict. Markets welcomed the news, pushing investors toward riskier assets and away from safe-haven plays like silver. While broader economic stability supports long-term industrial demand for silver, immediate safe-haven buying has dried up, pressuring spot prices lower in the short term.

Strong Dollar Caps Silver’s Upside

The U.S. dollar logged a modest 0.3% gain for the week, adding to silver’s downside pressure. A stronger dollar makes commodities priced in dollars more expensive for overseas buyers, dampening demand. Positive sentiment around U.S.-China trade progress, combined with solid U.S. economic data, kept the greenback firm and limited silver’s ability to reclaim higher ground.

Technical Picture: Potential Reversal Setting Up

Silver posted a potentially bearish closing price reversal top on Friday. A move through $32.77 would confirm the pattern, but sellers must drive the price through the 50-day moving average at $32.63 to trigger stronger downside momentum.

Below that, the next major support lies within a retracement zone between $32.19 and $31.45. A deeper decline could eventually test the 200-day moving average near $31.00.

Traders are now facing a clear choice: chase strength above $33.70 or wait for a pullback into lower support levels before re-engaging.

Short-Term Outlook: Cautiously Bearish with Key Support in Focus

With macro headwinds from a strong dollar and easing global risks, silver’s near-term bias leans bearish. Immediate focus will be on whether $32.77 support holds or breaks. Failure to hold above $32.63 could open the door to a deeper retracement toward $31.45. However, dips into key technical zones may attract buying interest, keeping longer-term bullish prospects intact if broader economic demand for silver stays resilient.

More Information in our Economic Calendar.