Silver Price Forecast: YTD lows at $54.77 come into view as XAG/USD breaks lower

Thursday’s sell-off takes XAG/USD down more than 3% to session lows below $56.00
An Oil price rally keeps precious metals under pressure.
The year-to-date low of $54.77 remains the bears’ target.

Selling pressure has returned to Silver (XAG/USD) on Thursday, with a sharp reversal from the $58.00 region taking the metal to session lows below $56.00 and restoring its broader downtrend. Higher Oil prices are weighing on precious metals, encouraging Silver bears to attempt another test of the year-to-date (YTD) lows at $54.77.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Reports that Israel is considering fresh attacks on Iran after the US midterm election provided another lift to Crude prices on Thursday. Such a move would further complicate efforts to negotiate an end to the conflict.

At the same time, Saudi Arabia has faced an increase in attacks by the Iran-backed Houthis. Reports of two deaths in a drone strike on Aframco’s Shaybah Oil field have revived fears of disruptions to Saudi Oil supplies. Following a rally of more than 2% over the previous two days, Brent Crude is trading above $108.00 per barrel at the time of writing, close to the five-month highs of $109.37 reached in mid-May.

Technical Analysis: Can bears push Silver towards the 2026 low of $54.77?

Bearish momentum is strengthening as XAG/USD trades at $56.20 within a broad descending channel. At around 36, the 4-hour Relative Strength Index (14) points to persistent selling pressure, but has yet to reach deeply oversold levels. Meanwhile, the Moving Average Convergence Divergence (MACD) has moved below zero, indicating that attempts at a recovery remain vulnerable within the established downtrend.

The first support zone lies between last week’s lows of $55.10 and the previously noted 2026 low of $54.77. Below this area, the lower boundary of the bearish channel drawn from the August highs currently sits near $53.65.

Any recovery would initially face resistance around $58.501, the top of the recent range. Beyond that, the descending channel’s upper boundary near $60.35 provides a second barrier, followed by the early October highs around $62.00.

(An AI tool assisted in writing the technical analysis for this article. Learn more.)

Silver: Frequently Asked Questions

What attracts investors to Silver?

With a long history as both a store of value and a means of exchange, Silver remains an actively traded precious metal among investors. Gold attracts greater interest, but traders may choose Silver for portfolio diversification, its intrinsic value or its potential to hedge against high inflation. Investment options include physical Silver coins and bars, as well as instruments such as Exchange Traded Funds that follow its price in international markets.

What drives movements in Silver prices?

Several forces shape Silver prices. During geopolitical turmoil or concerns about a severe recession, its safe-haven appeal can lift prices, though the effect is generally weaker than for Gold. Lower interest rates also tend to support Silver because it offers no yield. As Silver is quoted in US dollars (XAG/USD), movements in the US Dollar (USD) are another important influence: dollar strength tends to restrain prices, while a weaker dollar is likely to lift them. Investment demand, recycling rates and mine supply also matter, with Silver far more abundant than Gold.

Why does industrial demand matter for Silver prices?

Among metals, Silver has one of the highest levels of electrical conductivity, exceeding both Copper and Gold. This makes it widely used in industry, especially electronics and solar energy. Stronger demand can lift prices, whereas weaker demand tends to pull them lower. Developments in the US, Chinese and Indian economies can also drive price fluctuations. Large industrial sectors in the US and, particularly, China use Silver in a range of processes, while Indian consumer demand for Silver jewellery is another important influence on prices.

How closely does Silver follow Gold prices?

Given their similar safe-haven characteristics, Silver generally tracks Gold, typically advancing when Gold prices rise. Investors may use the Gold/Silver ratio to assess the metals’ relative valuations. This ratio measures how many ounces of Silver equal the value of one ounce of Gold. A high reading may be interpreted by some investors as a sign that Silver is undervalued or Gold is overvalued. Conversely, a low reading might indicate that Gold is undervalued compared with Silver.