Silver Price Forecast: $50 comes into view as bearish pressure intensifies

• Government bonds draw investors away from precious metals as Silver falls further.
• Persistent bearish momentum leaves XAG/USD exposed to additional declines.
• Sellers target the psychological $50 level as the RSI nears oversold territory.

Following Thursday’s 5.8% slump, Silver (XAG/USD) sets fresh lows for the year on Friday. Concerns surrounding AI-related investments have weighed on equities without generating safe-haven demand for Silver, as investors instead favour government bonds. Sales of precious metals by some traders may also be helping to cover losses on shares. Silver stands at around $53.89 at the time of writing, heading for its second successive weekly fall.

Rising energy costs associated with the Middle East war, which started in late February, have been the main driver of the decline. They have intensified inflationary pressures and led major central banks, notably the Federal Reserve (Fed), to increase interest rates. Against that backdrop, the white metal has lost roughly 55% from its January high near $121. As borrowing costs rise, so does the opportunity cost of holding assets such as Silver that provide no yield.

Whether Silver falls further or begins to recover could hinge in part on next week’s Fed meeting. Following a 25 basis point (bps) increase in September, the US central bank is widely expected to keep rates on hold. Nevertheless, another rise before year-end could remain an option as policymakers seek to bring inflation back to their 2% target. According to the CME FedWatch Tool, markets assign an 80% probability to a December rate increase.

Silver remains under technical pressure

A firmly bearish near-term outlook is evident on the daily chart: XAG/USD continues to fall below the lower boundary of its descending channel, trading well beneath both the 100-day Simple Moving Average (SMA) and the 200-day SMA.

The momentum indicators support that assessment. At 31, the Relative Strength Index (RSI) is close to oversold territory, while the Moving Average Convergence Divergence (MACD) indicator remains negative, below zero. An Average Directional Index reading of 30 points to a weakly trending backdrop.

Any recovery would first encounter resistance at $55, followed closely by the breached lower channel boundary around $56.50 and then the horizontal ceiling at $60. Beyond that, the bearish channel’s upper boundary and the 100-day SMA at $62 create a substantial obstacle before the $67 swing high and, ultimately, the 200-day SMA at $71.

With significant support apparent only at the $50 horizontal level, XAG/USD remains exposed to further losses for as long as it trades below these successive overhead resistance levels.

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