Silver (XAG) Forecast: Key Support Tested as Silver Drops on Hawkish Fed Talk

Silver Sinks as Rate-Cut Odds Fade — Buyers Step Back

Spot Silver finished the week on the defensive, slipping hard Friday as rate-cut expectations unraveled and traders bailed out of risk-on positions. The two-day reversal capped a rough stretch for the metal, which now looks vulnerable to further downside if key support gives way.

Fed Pushes Back, Bulls Lose Grip

XAGUSD closed at $50.58, down $1.70 or -3.26%, after slicing through short-term support on heavy volume. Friday’s session low of $50.06 put the market within a hair of the 50% support cluster at $50.02–$49.97. That zone is doing some heavy lifting right now — lose it, and things could accelerate quickly.

The trigger? A reset in Fed rate-cut bets. Multiple officials, including Kansas City’s Schmid and Cleveland’s Hammack, leaned into the “higher-for-longer” narrative this week. That helped slash the odds of a December cut below 50% and forced traders to rethink their positioning.

Silver, which had spiked earlier in the week near $54.39, got caught in the unwind — not just from bulls exiting, but from broader risk liquidation.

Tech stocks, AI names, and crypto all plunged. Gold didn’t escape either, shedding over 3% in a single session. When traders start raising cash fast, even the safe havens can get hit.

Dollar Can’t Rally, But Yields Stay Sticky

The U.S. Dollar Index finished the week slightly lower, struggling to find traction despite firm Treasury yields. That should’ve helped silver. It didn’t. The market ignored the soft dollar and stayed locked in on Fed commentary, suggesting sentiment is still shaky and buyers are in no rush to step in.

What’s making this pullback stickier is the absence of economic data. October’s inflation and jobs numbers are still missing in action thanks to the recent U.S. government shutdown. Without hard data, the Fed’s tone is driving the entire narrative — and right now, that tone isn’t dovish.

Technicals Signal Room to Fall

If silver breaks below $49.97, the next downside target is $48.93. After that, it’s a straight shot to the 50-day moving average at $47.39 — a level that could define the short-term trend. On the upside, resistance is stacked near $51.07, and bulls need a close above that line to regain momentum.

Bottom Line

Silver’s rally lost steam fast, and sellers are starting to test key support zones. Until dip buyers reappear with conviction, the path of least resistance leans lower — especially if the Fed keeps talking tough and the data stays out of sight.

More Information in our Economic Calendar.