Silver (XAG) Forecast: Fed Pressure Builds as Price Slides Toward 52-Week Moving Average

Silver’s Rough Week

Spot Silver closed the week-ending March 20 sharply lower. The selling pressure was fueled by a technical breakdown on the chart and rising Treasury yields. The trend is still up on the weekly chart, but momentum shifted to the downside nearly two months ago with the formation of the dramatic closing price reversal top at $121.67.

This bearish outlook was reaffirmed by the formation of a secondary lower top at $96.43. Currently, the selling pressure is just slicing through retracement levels and is now trading on the bearish side of a pair of 50% pivots at $74.63 and $74.99.

XAG/USD settled at $67.91, down $12.70 or -15.76%.

Taking out the 61.8% level at $63.97 with conviction will solidify the bearish outlook this week, with the 52-week low at $52.66 the next major target. Don’t look now, but early weekly swing chart analysis targets $39.66.

Five Fundamental Factors Behind the Selling

While the technical selling pressure was essentially attributed to just one key price level, I found at least five fundamental factors weighing on prices.

The Fed Is Still the Biggest Headwind

In my opinion, silver came under pressure last week mainly because of U.S. interest rate expectations. After last week’s meeting, it was clear that the Fed is still holding a firm stance as inflation risks remain tied to higher energy prices. Tight monetary conditions will continue to act as a strong headwind for silver in the short-term.

The War Proved Silver Is Not a Safe Haven

What became clear throughout a week of escalating tensions between the United States and Iran was silver was no longer acting like the safe-haven asset many thought it was. This past week showed that conditions like interest rates and liquidity had more of an influence than war headlines.

China’s Slowdown Is Cutting Into Demand

Silver prices were also influenced by weakness in the industrial sector. Recent data from China showed that China’s manufacturing sector remains in contraction. China is one of the biggest buyers of silver in the world. When their factories slow down, silver demand slows with them. Right now the numbers are pointing in the wrong direction and that’s not going to change overnight.

Oil Prices Are Making It Worse

Oil is another problem for silver. When energy costs rise, manufacturers pay more to run their operations. That slows production and cuts into demand for industrial metals like silver. Meanwhile the Fed stays tight because inflation isn’t going away, and that keeps a lid on any rally.

Bottom Line

Silver’s run earlier in 2026 got stretched. That’s what happens in speculative markets. They overshoot and then correct hard. Traders are now trying to figure out where the value is. The way I see it, with inflation staying elevated and rates staying higher for longer, the path of least resistance is still lower. Nothing on the horizon is changing that right now.

More Information in our Economic Calendar.