Silver (XAG) Forecast: ChinaTariff Fears Hammer Silver—Is a Deeper Drop Coming?

Silver Drops to 50-Day SMA as Tariff Risks Weigh on Outlook

Silver prices extended their losses Thursday, dropping nearly 2% and briefly breaking below the key 50-day moving average at $36.50.

After plunging to an intraday low of $36.21, the market saw a modest rebound to $36.44 as dip-buyers emerged.

The pressure on silver reflects a broader correction from last week’s $39.53 high, with growing concerns over trade tensions and weaker industrial demand weighing heavily on sentiment.

At 11:45 GMT, XAG/USD is trading $36.50, down $0.63 or -1.70%.

Tariff Tensions with China Cloud Industrial Demand Outlook

One of the main drivers behind silver’s recent sell-off has been renewed fears surrounding global trade.

President Trump’s announcement of sweeping tariffs — including a 15% levy on South Korean goods and a steep 50% tariff on Brazilian imports — has triggered concern among industrial metals traders.

While gold is benefiting from safe-haven flows, silver is being punished due to its industrial exposure. The unresolved tariff negotiations with China are particularly critical, raising doubts over forward demand from manufacturing and tech sectors reliant on silver.

Gold Rebounds as Dollar Eases, Fed Stands Pat

Gold’s resurgence has done little to lift silver, even though both often move in tandem during macro-driven sessions. Bullion jumped over 1% on Thursday as the U.S. dollar pulled back and Treasury yields eased.

The Federal Reserve kept rates steady at 4.25%–4.50% but signaled uncertainty going into the fall, with Chair Powell offering no firm guidance.

The upcoming core PCE report — forecast at 0.3% month-on-month — will be closely watched for inflation risks. Any upside surprise could pressure metals again if it revives hawkish Fed bets.

Technical Picture: $36.50 in Focus, $38.51 Is the Barrier

Technically, silver’s retreat from $39.53 has broken near-term support at $37.50 and now threatens a deeper pullback unless the 50-day SMA holds.

The $36.50 level is acting as a temporary floor, with the next key level lower at $35.28 if selling resumes.

On the upside, bulls would need a recovery above $38.51 to regain control, a level that previously served as resistance before the latest drop.

The broader trend remains positive as long as the 200-day SMA — now at $32.96 — stays intact, but short-term signals are deteriorating.

Outlook: Cautious Until Trade Uncertainty Clears

Silver’s near-term bias has turned defensive. The market remains vulnerable below $37.50, especially with industrial demand under threat from tariff uncertainty.

Unless trade tensions de-escalate or gold rallies significantly past $3303, silver is likely to remain rangebound to lower.

Traders should monitor the $36.50 support zone closely — a sustained break below this level could open the door to $35.28.

Until clearer signals emerge from the Fed or trade front, silver looks set for a choppy start to August.

More Information in our Economic Calendar.