Silver (XAG) Forecast: Weak Below 50-Day MA, Silver Analysis Signals More Downside

Spot Silver Slips Below 50-Day Moving Average as Dollar and Yields Apply Pressure

Spot Silver (XAGUSD) is edging lower at mid-session Tuesday. The setup looks like gold. Stronger U.S. Dollar Index, rising 10-Year U.S. Treasury yield and gold under pressure. All three are working against silver at the same time.

Dollar and Yields Are the Problem

When the 10-Year U.S. Treasury yield moves higher it raises the cost of holding a metal that pays nothing. The U.S. Dollar Index is staying firm on solid economic data.

Retail sales came in stronger than expected Tuesday. The consumer is holding up and that’s pushing yields higher as markets scale back rate cut expectations. Higher yields, stronger dollar. Silver gets hit from both sides.

Kevin Warsh is on the calendar and his tone on interest rates matters. If he leans toward keeping policy tighter that adds another headwind for silver and gold.

Iran Uncertainty Is Keeping a Lid on Everything

Trump’s comments on U.S.-Iran negotiations have been mixed. Iranian officials say talks could still continue despite recent tensions. No clear direction means traders stay cautious. That lack of conviction keeps metals capped. Silver follows gold in environments like this and gold isn’t giving it anything to work with right now.

Near Term the Bias Is Lower

Yields stay elevated and gold stays under pressure, silver rallies get sold. A shift in geopolitics or a drop in yields changes that. Until one of those happens the path of least resistance is down.

Technical Outlook

Technically, XAGUSD is lower after crossing to the weak side of the 50-day moving average at $78.83. This indicator is new resistance. Additional resistance is the price cluster formed by the swing top at $83.06 and the long-term 50% level at $83.61.

The momentum created by today’s price action looks strong enough to extend into the long-term 61.8% level at $74.63. This is followed by the short-term retracement zone at $72.03 to $69.43.

The long-term trend is up according to the 200-day moving average at $61.29 so silver could be setting up for a buy the dip formation if the selling can extend into the value area at $72.03 to $69.43. The next major move will likely hinge upon trader reaction to this zone. If it fails, we could be headed toward a retest of the support cluster formed by the 200-day moving average, the swing bottom at $61.00 and 50% of the all time high at $60.83.

For the bears, a new swing top has formed at $83.06. This new lower top is an indication of increasing selling pressure. Essentially, the next long-term move is going to come down to trader reaction to this wide retracement zone at $74.63 to $60.83.

As far as time is concerned, the rally from October 28 to January 29 took 65 market days, making May 4 our next major cycle date.

More Information in our Economic Calendar.