Silver (XAG) Forecast: Drop Below 50-Day Moving Average Flashes Warning for Bulls

Silver Slips Below Technical Support as Gold Retreats from Highs

Silver fell on Thursday, breaking below the 50-day moving average at $32.52 as traders reacted to a broader pullback in precious metals. The weakness followed gold’s sharp reversal from record highs, a signal that the precious metals rally may be cooling after a strong run driven by inflation fears and tariff uncertainty.

At 11:41 GMT, XAU/USD is trading $32.34, down $0.43 or -1.30%.

Gold Profit-Taking Spills Over to Silver

Gold surged to an all-time high of $3,357.77 earlier in the week before profit-taking set in, dragging prices lower and triggering technical selling. The move reverberated across metals markets, with silver breaking key support levels. While silver found near-term support at the 61.8% retracement level of $32.19, failure to hold above the 50-day average points to near-term downside risk. A drop below $32.19 could trigger a move toward $31.45, with deeper support resting at the 200-day moving average of $30.95.

Stronger Dollar and Rising Yields Add Pressure

Silver’s drop was reinforced by rising Treasury yields and a stronger U.S. dollar—both negative inputs for metals. The 10-year yield climbed to 4.319%, while the 2-year rose to 3.815%, reflecting renewed inflation concerns. The dollar’s strength, driven by euro softness and steady trade signals with Japan, has further reduced the appeal of non-yielding assets like silver and gold, especially for international buyers.

Policy Uncertainty Driving Volatility

Concerns over inflation have been amplified by political moves, with President Trump pushing for broader tariffs on critical mineral imports and sectors like pharma and semiconductors. Fed Chair Jerome Powell acknowledged the inflation risk but stressed the need for more data before committing to policy action. This policy limbo is keeping markets reactive, with metals trading on speculation rather than physical demand—evident from the cooling in Asian gold buying.

Market Forecast: Bias Turns Cautious as Metals Cool

With silver failing to reclaim the 50-day average and gold showing signs of short-term exhaustion, the precious metals trade is likely entering a consolidation phase. Silver could drift lower to test $31.45, with buyers potentially stepping in closer to $30.95. For bulls, a close back above $32.52 is needed to shift the tone and target $33.11 and beyond. Until then, price action favors cautious positioning, especially with macro crosswinds remaining unresolved.

More Information in our Economic Calendar.