Silver (XAG) Forecast: Will Rising Yields and Gold’s Weakness Drag Prices Lower?

Prices Fall 3.36% Amid Pressure from Gold and Macro Drivers

Silver prices dropped 3.36% last week, closing at $30.26 per ounce. A stronger U.S. dollar, rising Treasury yields, and cautious Federal Reserve policy expectations drove the market lower. Weakness in gold prices, which suffered their steepest weekly decline in over three years, further pressured silver and reinforced bearish sentiment across precious metals.

How Did Gold’s Plunge Affect Silver?

Gold prices tumbled 4.52%, ending the week at $2,563.22 per ounce. A surging U.S. dollar and elevated Treasury yields diminished demand for both gold and silver as safe-haven assets. The dollar’s strength, driven by robust retail sales and resilient economic data, made precious metals less attractive to international buyers. Gold’s technical breakdown, including a close below key support at $2,533.76, amplified bearish sentiment across the sector, dragging silver lower as markets reassessed both metals’ short-term prospects.

Why Are Treasury Yields Pressuring Silver?

Rising Treasury yields, particularly the 10-year yield climbing to 4.505%, increased the opportunity cost of holding non-yielding assets like silver. Despite the Federal Reserve’s recent rate cut, Chair Jerome Powell’s remarks last week reaffirmed the Fed’s cautious approach, with no urgency for additional easing. This higher-for-longer rate outlook further eroded demand for silver, paralleling gold’s struggles and limiting the appeal of both metals as investments in a high-rate environment.

What Do Weekly Technicals Indicate for Silver?

Weekly technical analysis highlights silver’s bearish trend. The close below the key pivot at $30.44 signaled persistent selling momentum. A sustained move under $30.44 could lead to further declines, with the broader support range of $26.47 to $26.02 in focus. However, if silver reclaims $30.44, it may attract speculative interest, with $32.28 as the next potential resistance level. Last week’s low of $29.68 reinforced the bearish tone, suggesting sellers remain in control. Analysts note that silver’s ability to reclaim $30.44 will be critical in determining near-term sentiment​.

What’s Next for Silver Prices?

The outlook for silver remains bearish in the near term. Failure to recapture the $30.44 pivot increases the likelihood of a move toward the $26 range, while continued strength in the dollar and Treasury yields adds pressure. Any stabilization in gold prices or a pause in the dollar’s advance could provide temporary relief, but broader macroeconomic factors remain a challenge. Traders are expected to focus on upcoming Federal Reserve commentary and key economic data, such as inflation and retail figures, to assess the direction of interest rates and their impact on silver and gold.