$50 in Focus: Silver Price Forecast as Bearish Pressure Builds

• Government bonds draw investors away from precious metals, deepening Silver’s decline.
• Persistent bearish momentum leaves XAG/USD exposed to additional declines.
• $50 psychological level comes into sellers’ sights as RSI nears oversold territory.

Silver trades around $53.89 at the time of writing. Following Thursday’s 5.8% plunge, Silver (XAG/USD) hits fresh yearly lows on Friday and heads for a second consecutive weekly fall. Concerns about AI-related investments pressured equities without generating safe-haven demand for Silver, as investors preferred government bonds. Some traders may also be liquidating precious metals to cover stock-market losses.

From its January peak near $121, the white metal has now lost roughly 55%. Higher energy costs associated with the Middle East war, which started in late February, have been the main driver of the sell-off. These costs have intensified inflationary pressures, prompting major central banks, notably the Federal Reserve (Fed), to increase interest rates. As borrowing costs rise, so does the opportunity cost of owning non-yielding assets such as Silver.

Whether Silver falls further or recovers could hinge on next week’s Fed meeting. Following September’s 25 basis points (bps) increase, the US central bank is widely expected to hold interest rates steady. Nevertheless, policymakers’ determination to bring inflation back to the 2% target could leave scope for another increase before year-end. According to the CME FedWatch Tool, markets assign an 80% probability to a December rate rise.

$50 support in focus: Technical outlook

A firmly bearish near-term bias remains evident on the daily chart. XAG/USD is extending losses beneath the descending channel’s lower boundary, trading well below both the 100-day Simple Moving Average (SMA) and the 200-day SMA.

At 31, the Relative Strength Index (RSI) sits close to oversold territory, reinforcing the negative momentum picture. The Moving Average Convergence Divergence (MACD) indicator also remains negative below zero, while an Average Directional Index reading of 30 highlights a weakly trending environment.

Any advance faces initial resistance at $55, then the breached lower channel boundary near $56.50 and the horizontal ceiling at $60. A concentrated resistance zone follows at $62, where the bearish channel’s upper boundary meets the 100-day SMA. Beyond that lie the $67 swing high and, finally, the 200-day SMA at $71.

With prices below these successive resistance levels, XAG/USD remains exposed to further losses. The only meaningful support on the downside lies at the $50 horizontal level.

(The technical analysis of this story was written with the help of an AI tool. Know more.)