Silver (XAG) Forecast: Dollar Strength Pressures Silver Market Despite Bullish Outlook

Silver Slips as Gold Rallies: What’s Behind the Divergence?

Silver prices slipped again on Thursday, diverging sharply from gold, which continues to gain on safe-haven demand. While gold hit multi-week highs on geopolitical tensions, silver has pulled back for the fourth consecutive session, now trading at $35.46 after touching a 13-year high of $36.89 earlier in the week.

At 11:17 GMT, XAG/USD is trading $36.15, down $0.20 or -0.56%.

This divergence underscores the dual nature of silver as both a precious and industrial metal. Unlike gold, silver’s price is more tightly tethered to global manufacturing and clean energy demand—factors that are less reactive to short-term geopolitical stress. The Israel-Iran conflict has ignited flight-to-safety flows into gold and the U.S. dollar, while silver has lagged due to its exposure to broader economic sentiment and industrial usage.

Technical Picture: Support Levels in Play, But Bulls Need a Break Above $36.89

Thursday’s close near $35.46 puts silver right at a key support zone, defined by previous tops at $35.40 and $34.87. If $34.87 is breached, traders could see a move down toward the 50-day moving average at $33.10. That said, a decisive trade through $36.89 would confirm a resumption of the uptrend. The metal has still managed to hold weekly gains, but it’s on fragile footing without a catalyst.

Fed and Dollar Moves Offer Crosswinds for Silver

The broader macro backdrop is also weighing on silver’s near-term appeal. Rising U.S. Treasury yields and a stronger dollar, both reacting to geopolitical risks and adjusted Fed rate-cut expectations, have helped support gold but increased headwinds for silver. With the dollar index bouncing to 98.33 and yields climbing, especially in the short end, silver’s industrial demand story remains subdued under tighter financial conditions.

Long-Term Drivers Still Intact: Green Energy and Supply Constraints

Despite the pullback, long-term structural factors remain supportive for silver. Demand for solar panels, EVs, and battery technologies continues to rise, while global silver production remains constrained. With limited mine supply growth and an expanding role in the global energy transition, any significant dip in silver prices is likely to be met with strategic buying.

Silver Price Forecast: Watch for a Breakout or Breakdown

Near-term, silver remains vulnerable to a break below $34.87, which would invite momentum sellers and likely push prices toward the $33.10 support. However, if bulls regain control and reclaim $36.89, a fresh leg higher could be in play. For now, traders should watch for signals from the dollar and gold, while respecting silver’s own critical levels and industrial demand indicators.

More Information in our Economic Calendar.