$50 Gives Way as XAG/USD Retreats: Silver Price Forecast Amid US Bond Market Turmoil

• Below $50.00: Silver reverses gains as US bonds sell off.
• Almost 5.5% is the rise in 10-year US Treasury yields over the past two trading days, taking them close to 5.13%.
• A December interest rate increase by the Fed is certain, according to the CME FedWatch tool.

Silver (XAG/USD) is back below $50.00. During Friday’s European session, the metal surrenders its modest early advance and resumes its broader decline as United States (US) bond markets face heavy selling. Accelerating inflationary pressures have led market participants to anticipate aggressive monetary tightening by the Federal Reserve (Fed) in the near term.

Almost 5.5% has been added to 10-year US Treasury yields over the past two trading days. At the time of writing, yields remain close to a three-week high near $5.13%.

In theory, non-yielding assets such as Silver become less attractive when returns on interest-bearing US assets rise.

+0.30% core CPI surprise weighs on US Treasuries

The latest US inflation figures accounted for the session’s largest market moves, according to strategists at Deutsche Bank: “that US CPI print drove the biggest moves of the day, with the monthly core CPI print for October above consensus at +0.30% (vs. +0.2% expected).” Emphasising the persistence of price pressures, they say “it was the third consecutive month with core CPI at +0.3%, and if you take those three months together, the annualised pace for core CPI is running at +3.75%.” In Deutsche Bank’s assessment, “that’s the fastest pace on that measure since April 2024, so it made it increasingly difficult to dismiss this as a blip.”

Headline inflation was stronger still. The bank notes that “meanwhile, the headline CPI numbers were faster still, with monthly headline CPI at +0.35% (vs. +0.3% expected), with the 3-month annualised pace at +5.72%.” Describing the market response to those figures, Deutsche Bank says “for markets, the clearest impact could be seen in US Treasuries, with yields surging across the curve.”

Traders have also increased their bets on a more hawkish Fed as US inflation rises. The CME FedWatch tool puts a December rate increase as certain, including a 10% probability of a 50 basis points (bps) rise.

$49.87: Silver Technical Outlook

At $49.87 on the daily chart, XAG/USD remains below its 20-period exponential moving average (EMA) of $53.08, maintaining a bearish near-term outlook. Trading beneath this short-term trend indicator suggests that rallies remain constrained. Meanwhile, a Relative Strength Index (RSI) reading of 34.76, below the neutral 50 threshold, points to continuing selling pressure rather than a decisive rebound from oversold conditions.

The first upside hurdle is the 20-day EMA near $53.08. Only a sustained move above it would soften the prevailing bearish tone and create scope for a more constructive recovery. While that resistance remains intact, momentum in the lower mid-30s is more indicative of corrective rebounds within a broader decline than a lasting trend reversal.

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