Silver (XAG) Forecast: Pivot at $36.30 Key as Silver Drops from Early Gains

Silver Under Pressure: Technical Breakdown Threatens 13-Year High Rally

Silver traded sharply lower on Monday, reversing from earlier losses that had driven prices to $37.23, just below the 13-year high of $37.32 reached on June 18. The white metal is now testing critical support levels as broader precious metals face headwinds from dollar strength and Federal Reserve policy concerns.

At 12:00 GMT, XAG/USD is trading $36.24, down $0.69 or -1.88%.

Critical Support Test at $36.30 Pivot

Silver is currently testing a short-term pivot at $36.30, with analysts warning that failure of this level could trigger a collapse into the major support zone between $35.40 and $34.87. The pullback from near 13-year highs suggests profit-taking pressure similar to gold’s decline, as investors reassess precious metals positions ahead of Trump’s tariff deadline and Fed policy clarity.

The intermediate trend remains well-supported by the 50-day moving average at $34.50 and the 200-day moving average at $32.40, keeping the market in “buy the dip” mode. However, traders appear reluctant to chase strength at current elevated levels, preferring to wait for pullbacks into value areas before adding positions.

Fed Policy and Dollar Strength Create Headwinds

Silver faces the same fundamental pressures weighing on gold as Federal Reserve policy expectations turn more hawkish.

Strong June employment data has eliminated prospects for July rate cuts, with

ClearBridge Investments noting the “solid June jobs report slams the door shut on a July rate cut.”

Capital Economics warned that “Trump’s tariff proposals and a more hawkish Fed do add to the downside risk” for precious metals broadly.

The dollar’s 0.4% rise against rivals makes silver more expensive for international buyers, adding selling pressure.

WisdomTree’s Nitesh Shah noted the “short-term positive dollar” driven by strong U.S. economic data that reduces “the immediate need to cut rates.”

Physical Demand Concerns Echo Gold’s Weakness

Like gold, silver faces physical demand destruction concerns as elevated prices impact industrial and investment demand.

HSBC’s James Steel highlighted that “underlying physical demand is down because of high prices” across precious metals, while Kitco’s Jim Wycoff identified “profit taking pressure from recent gains and a firmer U.S. dollar index” as bearish factors.

The rebound in global stock markets reduces safe-haven appeal for both gold and silver, with Wycoff noting that “less risk aversion in the marketplace” creates headwinds for precious metals broadly.

Outlook: Value Buyers Wait for Deeper Pullback

Silver’s technical setup suggests traders are waiting for deeper pullbacks before re-engaging. While the intermediate uptrend remains intact above key moving averages, the failure to sustain above the 13-year high indicates exhaustion at current levels.

Trump’s August 1 tariff implementation and potential 10% BRICS penalties create policy uncertainty, but strong economic data continues to reduce precious metals’ safe-haven premium.

A break below $36.30 opens downside to the $35.40-$34.87 support zone, where value buyers may emerge given the strong intermediate trend structure.

More Information in our Economic Calendar.