Silver (XAG) Forecast: 50-Day Moving Average Holds—Is a Silver Rally Brewing?

Silver Edges Higher, But Lags Gold as Industrial Demand Concerns Linger

Silver prices are trading modestly higher Monday, bouncing off the 50-day moving average for the third straight session. But while the technical picture offers some near-term support, the broader backdrop remains fragile, with silver continuing to underperform gold due to deepening industrial demand concerns and global trade pressures.

At 11:21 GMT, XAG/USD is trading $37.24, up $0.21 or +0.58%.

Gold Extends Rally on Fed Rate Cut Bets—Why Isn’t Silver Following?

Gold posted a sharp rally last week, driven by weak U.S. payrolls data that intensified expectations for a September Fed rate cut. With just 73,000 jobs added in July and June’s tally revised down to 14,000, the probability of a rate cut jumped to 78%, according to CME FedWatch. Gold surged as Treasury yields collapsed and the U.S. Dollar Index dropped 1.2%.

Silver, by contrast, fell 2.99% last week, settling at $37.02—even as gold gained 0.77%. The gold/silver ratio widened significantly, underscoring silver’s failure to track bullion’s monetary bid. This divergence reveals traders’ hesitation to treat silver as a safe-haven amid rising global industrial stress.

China’s Economic Weakness and Trade Tariffs Limit Silver’s Appeal

Ongoing concerns about Chinese industrial activity remain a key headwind for silver. Beijing’s latest PMI figures reinforced the narrative of manufacturing stagnation, weighing on the metal’s demand outlook. Additional pressure stems from new U.S. tariffs—15% on South Korean goods and 50% on Brazilian imports—disrupting supply chains and amplifying downside risk for industrial metals.

This macro backdrop has weakened silver’s historical correlation with gold. While gold finds support from monetary easing hopes, silver is increasingly tethered to economic indicators that suggest contraction.

Technical Picture: Bounce Holds, But Resistance Caps Momentum

Silver is attempting to reclaim ground after defending the 50-day moving average at $36.60 for a third session. With the recent range defined between $39.53 and $36.21, a 50% retracement implies a near-term upside target at $37.87.

However, firm resistance remains at $38.34 and $38.51. On the downside, key support sits at $36.21, $36.16, and $35.28. A break below these levels would likely trigger stop-driven selling.

Silver Outlook: Volatility Likely Ahead of CPI as Yields and Dollar Take Focus

With the CPI report still a week away, traders are likely to focus on near-term signals from Treasury yields and the U.S. Dollar. Any sharp moves in either could spark quick two-way action in silver, particularly given its recent divergence from gold.

Until industrial demand stabilizes or the Fed signals a more aggressive easing stance, silver may continue to underperform relative to bullion. Range-bound trading with headline sensitivity remains the base case.

More Information in our Economic Calendar.