XAG/USD Silver Price Forecast: Lower Highs Maintain Pressure Despite Recent Recovery

• A recovery in the US Dollar and Treasury yields slows Silver's advance after Wednesday's sharp rally.
• $55 Bollinger Midline Caps XAG/USD, Leaving Broader Bearish Bias Intact.
• An RSI rebound from oversold levels contrasts with a negative MACD and elevated ADX, which point to continued selling pressure.

Silver (XAG/USD) surged 5.18% the previous day. Extending those gains on Thursday is proving difficult as the US Dollar (USD) and Treasury yields rebound, sapping the rally's momentum. Earlier on Thursday, the metal reached $53.48, its highest since October 29. It subsequently retreated to around $52.79 at the time of writing.

A Democratic sweep of Congress set the stage for Wednesday's rally. Traders bet that a divided government could restrain fiscal expansion and pressure President Donald Trump to end the war with Iran. Broad US Dollar weakness followed the result. At the same time, falling Oil prices reduced inflation concerns and helped drive Treasury yields down, boosting demand for precious metals.

Still, the prospect of another interest rate hike by the Federal Reserve (Fed) in December underpins the Greenback. That remains an obstacle for non-yielding assets such as Silver.

US Initial Jobless Claims dropped from 194K to 189K, against expectations of 196K, according to Thursday's data. The four-week moving average also fell, from 196.75K to 194.75K. Friday's US Nonfarm Payrolls (NFP) report is now in focus for further indications of the Fed's policy direction.

Silver Technical Outlook

Lower highs on the daily XAG/USD chart suggest sellers remain in control following a brief peak near $70 in late August. Trading is confined to the lower half of the Bollinger Bands' volatility envelope. Silver remains beneath the bands' 20-period Simple Moving Average (SMA), roughly $55, and far below upper-band resistance near $61.67.

A strong Average Directional Index (ADX) reading above 40 highlights the continuing strength of the prevailing trend. Although the Relative Strength Index (RSI) (14) has rebounded from oversold levels to around 40, it is still below the midline. Moving Average Convergence Divergence (MACD) is also slightly negative. Together, these readings suggest downside momentum remains in place despite a modest easing in selling pressure.

The horizontal floor around $50.00 provides the nearest downside support. Beyond it, the lower Bollinger Band near $48.40 could offer volatility-based support should the sell-off continue. For any rebound, the first resistance is the Bollinger midline at about $55.04. Only a sustained move back above this barrier would clear a path towards upper-band resistance around $61.67, where sellers are likely to regain control.

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