Silver (XAG) Forecast: News Focus Turns to 50-Day MA for Rally Confirmation

Silver Tracks Gold Higher but Lags in Relative Performance

Silver rallied more than 1% on Monday, buoyed by strong gains in gold and a weaker U.S. dollar. The move came after silver successfully tested key support between $32.19 and $31.45, encouraging dip-buying interest. However, traders remain cautious as silver continues to underperform gold, with the gold-silver ratio widening further on the back of central bank demand and macro pressures favoring gold over silver.

At 10:36 GMT, XAG/USD is trading $32.41, up $0.40 or +1.25%.

Gold Surge Lifts Precious Metals

Gold jumped over 2% to start the week, hitting fresh highs on renewed rate-cut bets and a declining U.S. dollar. The dollar index fell 0.3% after disappointing U.S. GDP data, which bolstered the case for a more accommodative Federal Reserve later this year. This environment has reignited interest in precious metals, with silver moving in tandem but still trailing gold in overall momentum.

Goldman Sachs reaffirmed its bullish stance on gold, pointing to record central bank purchases, slowing Chinese solar production, and elevated recession risk. These macro drivers continue to widen the gold-silver performance gap. Spot gold has rallied nearly 26% this year, recently tagging a record high near $3,500 an ounce, while silver currently trades at $32.40.

Resistance Looms for Silver

Silver’s technical outlook is constructive in the short term but faces notable resistance. Monday’s rebound from the retracement zone has put buyers back in control, but the 50-day moving average near $32.60 remains a ceiling. A clean break above this level would target the recent high at $33.70. If silver fails to reclaim that zone, the metal risks being rangebound while gold pushes higher.

Rate Expectations and ETF Flows in Focus

The Fed’s policy decision on Wednesday is a key event for metals traders. While rates are expected to remain unchanged, any dovish tilt in the updated economic projections or Fed commentary could spark renewed interest in silver. However, silver-backed ETFs have yet to show meaningful inflows, unlike their gold counterparts, reflecting broader investor caution.

Market Outlook: Silver Likely to Trail Gold in the Near Term

Silver may continue to rise alongside gold on dollar weakness and rate-cut speculation, but it’s unlikely to lead. With strong central bank demand concentrated in gold and the gold-silver ratio trending higher, silver’s upside remains capped unless fresh catalysts emerge. Technicals point to further gains if $32.60 is cleared, but traders should expect silver to lag unless ETF demand or industrial support picks up meaningfully.

More Information in our Economic Calendar.