Silver (XAG) Forecast: Price Drops Below $32.80 as Bulls Lose Key Technical Support

Silver Slips Below $32.80 as Risk Appetite and Gold Weakness Drag Prices Lower

Silver prices came under heavy selling pressure Wednesday, breaking below key technical levels as improving global risk sentiment and a cooling gold market reduced investor interest in precious metals. The breakdown below the 50-day moving average at $32.80 is setting up further downside tests, with traders now eyeing lower support zones into the $31.00 region.

At 12:41 GMT, XAG/USD is trading $32.31, down $0.59 or -1.81%.

Fed Rate Cut Expectations Clash with Equity Market Strength

Despite expectations for around 53 basis points of Federal Reserve rate cuts starting in September, silver is struggling to find support. Lower interest rates typically favor non-yielding assets like silver, but that narrative has been overtaken by stronger equity performance and easing geopolitical tensions. The recent U.S.-China tariff truce has pulled capital into risk assets and out of safe-haven plays.

The agreement between the U.S. and China, which includes a 90-day halt to new tariffs and revisions to import thresholds, helped ignite a rally in global equities. This improved investor sentiment has hit gold prices, dragging silver lower in sympathy. Traders now question whether the silver market can hold near-term support if gold continues to weaken.

Key Levels in Focus: Can $31.26 Hold?

Silver’s break below the 50-day moving average has opened the door to a test of the support zone between $32.19 and $31.45. However, the more significant downside level sits at the 200-day moving average at $31.26. If that fails, the market could target $31.00 and possibly extend toward $30.37.

To the upside, if the market can recover above $32.80, silver faces immediate resistance at $33.25 and $33.70. Only a clean break above this area would re-invite bullish momentum toward $34.59 to $34.87.

Gold’s Bearish Turn Weighs on Silver Sentiment

Gold has slipped below $3,228 as safe-haven demand fades, and its own technical structure has turned bearish with focus shifting to the 50-day moving average at $3,151. Should gold break below this level, a cascade toward $2,787 could follow. Given silver’s close correlation with gold during risk-driven market phases, further weakness in gold could drag silver into deeper technical retracements—even if industrial demand remains intact.

Market Outlook: Silver Bias Turns Bearish with Eyes on $31.00 Support

With both gold and silver breaking below major support levels, the near-term silver outlook is decisively bearish. As long as the market remains under the 50-day moving average and gold fails to regain safe-haven interest, silver is likely to trade with a downside bias. Traders will need to watch equity markets, Fed commentary, and inflation data closely for any signs that could alter sentiment or revive interest in precious metals. For now, silver bulls are on the defensive, with $31.00 as the next crucial test.

More Information in our Economic Calendar.