Silver (XAG) Forecast: Reaction to 50-Day MA Sets the Tone Into the Close

Silver Edges Up, But Dollar Strength Caps Momentum

Silver prices showed modest gains on Thursday, but the metal remains on fragile technical ground as broader market forces—including a stronger dollar, firm Treasury yields, and weakening gold—continue to weigh on the precious metals complex.

At 14:51 GMT, XAG/USD is trading $32.68, up $0.22 or +0.68%.

Spread Unwinding and Technical Pressure

Silver’s mild rise contrasts with gold’s drop, pointing to a likely unwinding of long gold/short silver spread trades. This realignment suggests diminishing investor appetite across the precious metals space, as sentiment continues to sour.

Silver is still trading below its 50-day moving average, a key near-term indicator. A firm push under this level would reinforce downside momentum, with $32.19 seen as the next critical support. A break below that could open the door to $31.45, and ultimately the 200-day moving average at $31.18—a line few bulls would want to test.

Upside is limited unless silver clears the 50-day and pushes through $33.25. Even then, technical resistance at $33.70 looms, creating a narrow band of opportunity for short-term longs.

Dollar Strength and Treasury Yields Apply Pressure

The U.S. dollar remains firm, rising to 100.21 on the DXY following President Trump’s UK trade deal announcement and the Federal Reserve’s decision to hold rates steady. Stronger jobless claims and rising Treasury yields—10-year at 4.304%, 2-year at 3.822%—add fuel to the greenback’s strength, a headwind for silver priced in dollars.

As the dollar gains versus the yen and euro, precious metals become more expensive for overseas buyers, dampening physical demand and putting further strain on silver’s upside potential.

Gold Weakness Undermines Silver

Gold’s failure to break resistance at $3351.08 adds another layer of pressure on silver. With gold slipping toward the $3318.50 support level and possibly lower, the broader metals sentiment appears increasingly bearish. Unless gold reclaims key levels, any silver strength will likely be short-lived or range-bound.

Near-Term Outlook: Downside Risk Prevails

Unless silver decisively reclaims the 50-day moving average and overcomes resistance at $33.25, the market leans bearish. Rising Treasury yields, a resilient U.S. dollar, and weak gold add downside risk.

A close below $32.19 could accelerate selling, with $31.45 and $31.18 in play. Traders should watch for weekend developments in U.S.-China trade talks for any signs of reprieve, but for now, the setup favors sellers.

More Information in our Economic Calendar.