Silver Price Forecast: XAG/USD stays under pressure as lower highs persist despite recent rebound

• Wednesday's sharp rally in Silver loses steam as Treasury yields and the US Dollar rebound.
• The broader bearish bias persists as XAG/USD trades beneath the Bollinger midline around $55.
• Despite the RSI's recovery from oversold levels, a negative MACD and elevated ADX point to continued selling pressure.

After a 5.18% surge the previous day, Silver (XAG/USD) is struggling to build on its gains on Thursday as firmer Treasury yields and a recovering US Dollar (USD) temper the advance. Earlier in Thursday's session, the metal reached $53.48, its highest since 29 October, before slipping back to around $52.79 at the time of writing.

A Democratic sweep of Congress underpinned Wednesday’s advance. Traders wagered that a divided government could restrain fiscal expansion and pressure President Donald Trump to end the war with Iran. The result prompted widespread weakness in the US Dollar. Meanwhile, falling Oil prices allayed inflation concerns and contributed to a decline in Treasury yields, boosting demand for precious metals.

Nevertheless, the prospect of a further Federal Reserve (Fed) interest rate increase in December is supporting the Greenback, limiting the appeal of non-yielding assets such as Silver.

US Initial Jobless Claims dropped from 194K to 189K, undershooting expectations of 196K, according to Thursday’s release. A decline from 196.75K to 194.75K was also recorded in the four-week moving average. Friday’s US Nonfarm Payrolls (NFP) report is now in focus as traders seek further indications of the Fed’s policy direction.

Technical Analysis: XAG/USD Remains Under Selling Pressure

Successive lower highs on the daily XAG/USD chart suggest that sellers remain in control following a brief peak near $70 in late August. Trading in the lower half of the volatility envelope, Silver remains beneath the Bollinger Bands’ 20-period Simple Moving Average (SMA), around $55, and considerably below resistance at the upper band near $61.67.

Although the Relative Strength Index (RSI) (14) has rebounded from oversold levels to around 40, it has yet to regain the midline. Moving Average Convergence Divergence (MACD) is still marginally negative, suggesting that downward momentum remains in place despite a slight easing in selling pressure. Meanwhile, an Average Directional Index (ADX) reading above 40 indicates that the prevailing trend retains considerable strength.

The horizontal floor around $50.00 offers the nearest downside support, followed by the lower Bollinger Band near $48.40, where volatility support could materialise should the sell-off continue. Any advance would first encounter resistance at the Bollinger midline around $55.04. A sustained move above this level would be needed to 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.)