Silver (XAG) Forecast: Is This Intraday Bounce the Start of a Rally or Just Noise?

Silver Slips Below Key Levels as Dollar Strength and Fed Uncertainty Weigh

Silver prices retreated Thursday, with technical pressure intensifying as the metal fell below its 50-day moving average. Traders confronted a confluence of bearish factors, including a stronger U.S. dollar, firmer yields, and renewed uncertainty surrounding Federal Reserve policy, all of which curbed appetite for precious metals.

At 14:58 GMT, XAG/USD is trading $32.30, down $0.32 or -0.99%.

Technical Breakdown Undermines Bullish Momentum

The market dipped sharply to $31.67 in early trade before recovering, but the failure to reclaim the 50-day moving average at $32.65 now defines that level as short-term resistance. Thursday’s move tested the retracement zone between $32.19 and $31.45—key support for near-term direction. A sustained break below this band could put the 200-day moving average at $31.07 in play, a level many traders are now eyeing for potential downside targets.

Dollar Finds Support on Yen Weakness and Data Sensitivity

The U.S. Dollar Index ticked higher, supported primarily by a steep drop in the Japanese yen. After the Bank of Japan left rates unchanged and downgraded its growth outlook, the yen fell more than 1%, briefly touching 144.74. This currency divergence gave the dollar a modest lift, with DXY pressing toward the April 15 high of 100.276. If that level is breached, technical projections point to the 50% retracement zone at 101.302 as the next target. A stronger dollar tends to weigh on silver by raising the opportunity cost for non-yielding assets.

Fed Outlook Remains Murky as Jobless Claims Rise

Adding to the pressure, mixed U.S. economic signals have kept Fed expectations in flux. While Treasury yields dipped—10-year at 4.147% and 2-year at 3.568%—jobless claims unexpectedly rose to 241,000. This, coupled with a Q1 GDP contraction of 0.3%, has increased bets on a rate cut later this year. However, next week’s Fed meeting is expected to be uneventful. The true pivot may hinge on Friday’s nonfarm payrolls, with the market eyeing a 130,000 hiring estimate. Any surprise could jolt rate bets and ripple through metals markets.

Market Outlook

Silver remains vulnerable in the short term. Without a recovery above the 50-day moving average, rallies are likely to meet selling. Continued strength in the dollar, tied to global rate differentials and economic data, poses a headwind. Traders should monitor support around $31.45; a breach could accelerate selling toward $31.07.

More Information in our Economic Calendar.