Silver Price Forecast: XAG/USD Extends Fall Below $54.00 as YTD Lows Deepen

Selling pressure pushes Silver below $54.00 on Friday, extending the previous day’s sharp decline.
With technical indicators favouring the bears, the downtrend of the past two months could continue.
Selling could emerge on any recovery attempt, limiting gains near the round-number level of $58.00.

Bearish pressure keeps Silver (XAG/USD) headed for a second consecutive week of steep losses, as Friday’s Asian session sees prices hit their lowest since November 2025. Sellers are now seeking to carry the decline below $54.00. The technical picture also indicates that further downside remains the path of least resistance for the white metal.

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A negative outlook for XAG/USD is reinforced by this week’s unsuccessful attempts to establish a foothold above $58.00, the 38.2% Fibonacci retracement level of the May-July decline. The metal also continues to trade well below its 200-day Simple Moving Average (SMA). Further supporting the bearish picture, the Moving Average Convergence Divergence (MACD) indicator remains below zero, with its latest reading at -0.34.

There is, however, a sign that selling momentum may be nearing exhaustion rather than developing into a fresh impulsive decline: the Relative Strength Index (RSI) stands at 31.53, close to oversold territory. Downward momentum remains dominant, but this reading warrants caution. A sustained breach of $54.00 would therefore be prudent to await before positioning for a continuation of the roughly two-month downtrend.

For XAG/USD to ease the current bearish pressure and pave the way for a more durable recovery, several resistance levels must be overcome. The first is the horizontal zone at $55.50; a move above it could allow a test of $58.00. Beyond that lie the psychological level of $60.00, the $61.50-$61.55 area and the 23.6% Fibonacci level around $63.00.

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

What Does the XAG/USD Daily Chart Show?

Common Questions About Silver

What attracts investors to Silver?

Portfolio diversification, intrinsic value and a potential hedge against high inflation are among the reasons traders may choose Silver, even though it is less popular than Gold. Widely traded by investors, this precious metal has historically served both as a store of value and as a medium of exchange. Investors can gain exposure by purchasing physical Silver coins or bars, or through instruments such as Exchange Traded Funds that follow its price in international markets.

What drives changes in Silver prices?

Several influences shape Silver prices, including interest rates, currency movements and demand for safe-haven assets. Since Silver offers no yield, lower interest rates generally support its price. Geopolitical uncertainty or concerns about a severe recession can also lift prices because of its safe-haven appeal, though the effect is less pronounced than for Gold. Pricing in US dollars means that movements in the US Dollar (USD) also matter for XAG/USD: a stronger Dollar generally restrains Silver prices, while a weaker Dollar is likely to lift them. Investment demand, the supply from mining and recycling rates are additional influences; Silver is far more abundant than Gold.

Why does industrial demand matter for Silver prices?

Stronger industrial demand can lift Silver prices, whereas a slowdown generally weighs on them. The metal is used extensively in industry, notably in electronics and solar energy, because its electrical conductivity ranks among the highest of all metals, exceeding that of Copper and Gold. Developments in the US, Chinese and Indian economies can also cause price fluctuations. Large industrial sectors in the US and, especially, China use Silver in a range of processes. In India, consumer demand for Silver jewellery is another important factor in determining prices.

How closely do Silver prices track Gold?

Given their similar safe-haven status, Silver generally tracks Gold’s price movements and typically rises when Gold advances. Investors may assess the relative valuation of the two metals using the Gold/Silver ratio, which measures how many ounces of Silver equal the value of one ounce of Gold. A high ratio may be interpreted by some investors as a sign that Silver is undervalued or Gold overvalued. Conversely, a low reading may indicate that Gold is undervalued compared with Silver.