Silver (XAG) Forecast: Bearish Reversal in Play as Silver Drops Below $52.32

Silver Retreats After Multi-Year High: Is the Rally Losing Steam?

Spot silver (XAG/USD) eased lower Tuesday after reaching a fresh multi-year high at $53.62, with mid-session trade slipping to $52.27. The pullback follows signs of exhaustion at current levels, as traders brace for a potential correction following an intense rally driven by tight physical market conditions and safe-haven demand.

At 16:35 GMT, XAG/USD is trading $51.58, down $0.74 or -1.41%.

Potential Reversal in Play as Market Tests Resistance

Price action is now closely watched for a potential bearish closing price reversal top — a technical pattern that could trigger a 2–3 day correction. If confirmed, initial downside targets include $50.48, with further support at $47.33. A break of that level would shift short-term momentum to the downside. The 50-day moving average at $42.42 remains the key trend indicator and major support level.

Fed Dovish, but Silver Pulls Back — Is the Rate Cut Fully Priced In?

Federal Reserve Chair Jerome Powell reiterated a dovish stance during his NABE speech, noting that the Fed will take a “meeting-by-meeting” approach and that the U.S. economy may be on “somewhat firmer footing” than previously expected.

However, the lack of a sustained rally in silver following his comments suggests traders had already priced in a 25 basis point rate cut at the upcoming FOMC meeting. Another cut is expected in December, though Powell stressed that policy remains data-dependent.

Short Squeeze in London Losing Steam

While the record high in silver was largely driven by a pronounced short squeeze in the London market, traders report that pressure is starting to ease. This easing could remove one of the key catalysts behind the recent parabolic rise. Still, physical tightness and correlation with gold — which also surged to record highs this week — continue to provide underlying support.

Silver Outlook: Cautious Bullish Bias, But Watch for Technical Signals

The immediate outlook for silver leans bullish while price holds above $50.48. However, failure to maintain current levels — especially if confirmed by a bearish reversal close — could open the door to a deeper correction toward $47.33. Traders should monitor for confirmation signals and stay alert to any developments in Fed commentary or U.S.-China trade tensions, which remain active drivers of precious metal sentiment.

More Information in our Economic Calendar.