Silver falls to new yearly lows at $52.34 on hopes of further Fed tightening

• Below $52.50, XAG/USD extends its accelerating decline to new 2026 lows.
• Expectations of a December Fed rate rise weigh on precious metals on Thursday.
• Wednesday’s decision to hold monetary policy steady saw the Fed reiterate its commitment to returning inflation to target.
  

Prospects of further monetary tightening in December, reinforced by Wednesday’s Federal Reserve (Fed) meeting, weighed on precious metals on Thursday. Silver (XAG/USD) extended its decline at a faster pace as sellers tested the bottom of this year’s trading range near $52.60. The pair has so far fallen to a new year-to-date (YTD) low of $52.34.

As widely anticipated, the Fed kept monetary policy on hold while it awaited a clearer picture of the economic effects of September’s rate rise. Although Chairman Kevin Warsh offered no indication of what December’s meeting might bring, he restated the bank’s determination to lower inflation. Markets have interpreted that message as signalling further interest rate increases ahead.  

An 83% probability of a quarter-point rate increase in December is now implied by futures prices, little changed since the Fed meeting but above last week’s 77% chance. These expectations continue to lend modest support to the US Dollar while leaving precious metals under pressure for now.

Technical Analysis: Silver approaches channel-floor support near $51.85

With XAG/USD quoted at $52.36 at the time of writing, the near-term outlook remains bearish. The price sits just above the lower boundary of the descending channel drawn from the late August lows. Indicators on the 4-hour chart reinforce that assessment: the Relative Strength Index (14) is hovering just above oversold territory, while the Moving Average Convergence Divergence (MACD) has edged below zero.

Should the channel floor near $51.85 give way decisively, attention would turn to the psychological $50.00 level, followed by the late November 2025 low around $48.65. A deeper fall is unlikely given the currently limited upward momentum in the US Dollar Index (DXY).

Any recovery would initially face resistance around $54.85, the previous YTD lows. Beyond that lies the $58.50 area, where the channel’s upper boundary meets last week’s trading high.

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