Silver (XAG) Forecast: Price Clings to 50-Day MA as Bulls Look to Regain Control

Silver Slides as Yields Rise and Growth Fears Mount

Silver prices traded lower on Wednesday as a series of key U.S. economic reports rattled investor sentiment and lifted Treasury yields. Despite the pullback, the metal held support near $32.19—a level now seen as critical. A break below could expose the market to a retracement toward $31.45, the 50% Fibonacci level of the recent rally.

At 13:11 GMT, XAG/USD is trading $32.74, down $0.20 or -0.61%.

Technical Setup: $32.19 Support Holding—For Now

Silver is straddling its 50-day moving average at $32.66. This technical marker is closely watched as a gauge of intermediate trend strength. A sustained move above it could reignite bullish momentum and lead to a retest of the recent high at $33.70. For now, buyers appear cautious, holding off in response to macroeconomic headwinds.

Private Hiring Slows Sharply

ADP’s April employment report showed private payrolls rose by just 62,000, far short of expectations for 120,000. This marked the weakest monthly gain since July 2024, driven largely by hiring uncertainty tied to newly imposed tariffs. Wage growth for job-stayers softened to 4.5%, while job-changers saw a modest uptick to 6.9%. The data hints at growing employer caution, reinforcing concerns about slowing domestic demand.

GDP Contracts as Inflation Accelerates

The U.S. economy shrank 0.3% in the first quarter, falling well below expectations for 0.4% growth. The miss was largely driven by a 41.3% surge in imports, as firms front-loaded purchases ahead of tariff hikes. While consumer spending remained positive, it slowed notably to a 1.8% pace, and inflation surprised to the upside. The core personal consumption expenditures index jumped 3.5%, up from 2.4% in Q4—well above the Fed’s 2% target.

Yields Rise on Hot Inflation Data

Treasury yields edged higher, with the 10-year gaining 2 basis points, as traders digested the inflation components of the GDP report. Markets are still pricing in a rate cut in June and multiple cuts by year-end, suggesting traders believe the Fed may prioritize supporting growth even as inflation remains sticky. However, the inflation surprise has introduced new uncertainty ahead of next week’s Fed meeting.

Short-Term Outlook: Cautious Bias with Support in Focus

With GDP in contraction and inflation reaccelerating, silver is caught between safe-haven interest and a stronger dollar driven by rising yields. Unless the $32.19 support gives way, the market may consolidate in the $32–$33.70 range. A clean move above the 50-day average could shift sentiment back toward the upside, but for now, sellers appear to have a slight edge.

More Information in our Economic Calendar.