Silver (XAG) Forecast: Direction Hinges on Dollar—$37.64 Support Level in Focus

Silver Slips as Dollar Strength and Fed Clarity Weigh on Metals

Silver prices edged lower Thursday, consolidating recent losses as a stronger U.S. dollar and easing concerns over Federal Reserve leadership sapped demand for precious metals. After falling from a 14-year high of $39.13 to $37.50, silver now trades near key technical support with traders assessing whether this pullback will extend or stabilize.

At 12:09 GMT, XAG/USD is trading $37.89, down $0.02 or -0.05%.

Dollar Gains and Treasury Yields Pressure Silver and Gold

The U.S. Dollar Index rose 0.3%, building pressure on dollar-denominated assets like silver and gold. A firmer dollar makes metals more expensive for non-dollar holders, curbing speculative interest. At the same time, Treasury yields ticked higher—10-year yields reached 4.467%, while 2-year yields climbed to 3.915%—cutting into the appeal of non-yielding assets.

Gold mirrored the weakness in silver, slipping sharply after failing to hold above its short-term pivot. Earlier rumors of Fed Chair Powell’s possible removal had lifted gold, but President Trump walked back those comments, calming markets. With Fed interference concerns receding, traders turned their focus back to core economic data and central bank guidance—key inputs for both silver and gold pricing.

Fed Commentary and U.S. Data in Focus

Traders are eyeing Thursday’s slate of U.S. economic indicators—retail sales, jobless claims, and inflation-linked import/export price data—as well as scheduled speeches from Fed officials. Weak data could revive demand for precious metals, especially if dovish tones emerge in Fed messaging.

WisdomTree’s commodities strategist Nitesh Shah noted that gold’s earlier spike was driven by unfounded rumors, and the subsequent reversal reflects cooling safe-haven demand. Silver, closely tied to gold’s sentiment flow and industrial demand, remains vulnerable to any surprise in Fed rhetoric or macro prints.

Key Silver Levels to Watch as Market Tests Support

Technically, silver’s short-term range runs from $36.16 to $39.13. Current support at the $37.64 pivot is under threat. A breakdown below this level opens the door to test deeper support near $36.16 and $35.28, with the 50-day moving average offering an additional buffer at $35.30. These zones are expected to attract dip-buying interest from longer-term bulls.

On the upside, reclaiming $38.31 would be the first sign of renewed strength, with resistance retesting likely at $39.13, the recent high.

Market Outlook: Bearish Bias Holds Unless Support Triggers Rebound

Without a clear bullish catalyst—such as dovish Fed remarks or disappointing U.S. data—silver remains exposed to further downside. A breach of $37.64 could accelerate selling toward the 50-day moving average. However, any surprise weakness in economic data may offer silver a lifeline, especially if the dollar rally stalls.

For now, traders should expect a cautious tone with downside risk prevailing unless buyers step in at key technical support.

More Information in our Economic Calendar.