Silver (XAG) Forecast: Long-Term Support Levels in Focus as Rate Hike Fears Grow

Spot and Comex silver finished lower on Friday after taking out their most recent bottoms. The move has put these markets in a position to challenge longer-term technical levels. The primary factors weighing on prices were higher Treasury yields, a bullish U.S. Dollar and strong Fed rate hike expectations. The price action suggests the latest monthly producer inflation data, which came out below expectations, had little influence on traders.

On Friday, Spot Silver (XAGUSD) closed at $48.77, down $1.29 or -2.58% and December Comex Silver settled at $49.12, down $0.94 or -1.89%.

Rate Hike Outlook Keeps Pressure on Silver

The Bureau of Labor Statistics reported a 0.3% increase in producer prices for October, less than economists expected. But the annual rate rose to 6.5% from 6.3% in September.

I don’t think the monthly number was weak enough to change the Fed’s thinking after Tuesday’s hot CPI report. The FedWatch graphic shows traders are still pricing in a December rate hike. I think the bigger question for silver is how much higher the Fed will take rates and how long they will stay there.

The U.S. Dollar Index has taken out its recent swing top at 102.945 and is approaching the longer-term top at 103.540. The dollar’s uptrend is still intact, which gives silver buyers another problem to contend with.

I’m watching how the dollar reacts at 103.540. If buyers take out that top, silver could come under more pressure. If the dollar stalls, silver may get some relief, but I would need to see more than one pause in the dollar rally before looking for a sustained recovery in silver.

Silver traders also reacted to a rise in the 10-year Treasury yield to 5.172% on Friday before it pulled back below the upper level of its retracement zone at 5.155%.

A sustained move above 5.155% could support another push higher in the dollar. That would leave silver facing the same pressure it did this week. If yields turn lower, silver could attract counter-trend buyers.

Daily Spot Silver (XAGUSD) Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed on Friday when sellers took out the previous main bottom at $48.62. A trade through $53.73 will change the main trend to up.

Spot Silver is currently trading inside 50% to 61.8% of the all-time high at $121.67. This retracement zone is $60.835 to $46.48. Under the last level is the October 28, 2025 main bottom at $45.55. If it fails to hold then prices could collapse into the September 17, 2025 main bottom at $41.14.

Daily December Comex Silver Futures Technical Analysis

December Comex silver is in a downtrend on the daily chart. The trend was reaffirmed on Friday when $48.62 was taken out. A trade through $53.78 will change the main trend to up.

What to Watch

Daily Spot Silver (XAGUSD)

My bias is to the downside and will remain bearish as long as the main trend on the 2-day swing chart continues to post lower tops and lower bottoms. I’m looking for the selling pressure to resume next week with a breakdown under Friday’s low at $48.49 with the next objectives the all-time 61.8% level at $46.48 and the October 28, 2025 main bottom at $45.55.

A trade through $53.73 will change the main trend to up and change my bias to bullish with the objective in this case the 50-day moving average at $58.54.

Daily December Comex Silver Futures

The main swing chart is driving my bearish bias. As long as the futures contract continues to make lower tops and lower bottoms my outlook will be based on weakness.

My next objectives are a long-term 61.8% level at $47.74, followed closely by a long-term main bottom at $47.50. The latter is a potential trigger point for an acceleration to the downside with another long-term bottom at $43.61 the next target.

My downside bias will change if traders can break the chart pattern by taking out a swing top with conviction. The nearest swing top is $53.78.

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