Silver (XAG) Forecast: Outlook Turns Bearish as Rally Unwinds Toward $44 Support

Silver Falls Sharply as Liquidity Relief, Profit-Taking Shift Sentiment

Spot silver (XAG/USD) extended its losses Wednesday, retreating further from last week’s record highs as aggressive profit-taking, surging U.S. dollar strength, and easing supply tightness in London triggered a decisive sentiment shift. Prices failed to hold the $50.91 pivot, tumbling toward support near the $44 zone, with sellers gaining momentum on the break.

At 12:29 GMT, XAG/USD is trading $48.08, down $0.62 or -1.27%.

Speculative Surge Unwinds as Buyers Step Aside

The recent rally that took silver to an all-time high of $54.47 on Friday was driven by speculative buying, strong physical demand from India, and tight market liquidity in London. But with the squeeze now easing and air deliveries from the U.S. and China restoring supply, the sense of urgency among buyers has evaporated. Spot silver briefly traded below $52 on Monday and continues to retrace as bulls avoid chasing at elevated levels.

According to traders, the influx of up to 1,000 tons into London vaults—most of which were previously allocated to ETFs—has begun to relieve the spot market pressure that had triggered premiums over Comex futures. Short-term silver borrowing rates, which hit record highs on October 10, also pulled back by Friday.

Supply Rebalance from U.S. and China Weighs on Price

Approximately 697 tons of silver have exited Comex warehouses since October 3, a reversal of the buildup seen earlier this year tied to U.S. tariff uncertainty. Further outflows are contingent on the outcome of an upcoming U.S. probe into critical mineral imports.

China, the world’s second-largest producer, has also begun shipping metal, though some supply is being diverted to India, where festival-season premiums remain elevated.

Still, the large-scale arrivals into London are curbing global supply tightness—dulling one of the key bullish narratives behind the recent spike.

Gold’s Retreat Underscores Waning Safe-Haven Bid

Gold’s 7% slide since Monday—triggered by dollar strength, ETF outflows, and unwinding Fed rate-cut bets—has mirrored the pressure on silver. With no fresh geopolitical catalyst or inflation shock, the safe-haven trade has lost momentum across the board. Silver, which often tracks gold directionally, remains vulnerable to broader sentiment shifts in precious metals.

Outlook: Bearish Bias Into $44 Support Zone

The tone in silver is bearish for now, with downside momentum expected to target minor bottoms at $47.33 and $45.81. A deeper move toward $44.00, where the 50-day moving average sits, appears likely before value-oriented buyers step back in. Until signs emerge of renewed demand or tightening conditions, rallies may be capped below the $50.91 resistance level.

More Information in our Economic Calendar.