Silver (XAG) Forecast: Reversal Risk Rattles Bulls as Silver Rally Loses Steam

Silver Backs Off Highs as Reversal Risk Grows

Silver surged early Thursday, punching up to $54.39 — just a hair below the multi-year high at $54.49 — before sellers stepped in hard. The sharp intraday reversal sets the stage for a potential bearish closing price reversal top, a pattern that doesn’t necessarily signal a trend change, but often shows the market needs to cool off.

At 18:42 GMT, XAGUSD is trading $52.59, down $0.67 or -1.27%.

Watch $52.06 on Friday. A decisive move below that level would confirm the reversal pattern and open the door to a pullback toward the short-term support zone between $49.97 and $48.93. That would be a logical place for dip buyers to show up — if the broader risk environment allows.

Technically, talk of a double top is premature. We don’t have one until the swing low at $45.55 gets taken out with conviction. But Thursday’s action shows the bulls are getting nervous. Profit-taking kicked in quickly near the highs, and with gold also reversing off its own three-week high, it’s clear traders were looking for a reason to cash out.

Gold Fades as Fed Rate Cut Bets Stir Caution

Gold initially rallied Thursday on bets that delayed economic data — now likely coming post-shutdown — could highlight labor market softness and push the Fed toward another rate cut in December. That narrative fueled an early surge, but it couldn’t stick. Sellers knocked gold lower into the close, mirroring the move in silver.

The correlation between gold, the dollar, and yields has faded a bit in recent weeks, as traders focus more on structural themes like currency debasement and long-term debt risks. That may keep a floor under precious metals, even if short-term corrections kick in.

Yields Edge Higher, Silver Shrugs Off Dollar Weakness

Rising Treasury yields also pressured metals Thursday. The 10-year note rose to 4.11%, while the 2-year climbed to 3.59%. That makes non-yielding assets like silver less attractive. Meanwhile, a weaker U.S. dollar offered little support, reinforcing that sentiment — not just macro correlations — is steering the tape.

Bottom Line: Volatility’s Back

The silver rally stalled at a key level. The next 24 hours matter. A break below $52.06 would confirm the short-term top and likely draw sellers toward $50. Despite the topping action, the market will remain in “buy the dip” mode as long as the 50-day moving average at $47.20 holds as support.

A clean break below that could put the last swing bottom at $45.55 in play. If that level fails, it would confirm a double-top — and shift the broader trend picture. Until then, bulls still hold the longer-term edge.

Expect elevated volatility as traders adjust positioning around the Fed rate cut narrative and delayed U.S. data.

More Information in our Economic Calendar.