Silver (XAG) Forecast: Reversal Top Sparks Defensive Pullback as Fed Dials Back Easing Hopes

Silver Pulls Back as Rate Cut Bets Unwind and Reversal Top Takes Hold

Spot silver (XAGUSD)  is under pressure Friday, following through on Thursday’s confirmed closing price reversal top. The technical signal has triggered light profit-taking, and with gold also retreating, silver bulls are stepping aside — at least for now.

The move comes as traders recalibrate their rate cut expectations following a sharp shift in Fed commentary. The tone has cooled what was once near-certainty for a December cut, now replaced with caution from policymakers and uncertainty in the data.

At 13:17 GMT, XAGUSD is trading $51.23, down $1.25 or -2.01%.

Fed Puts Easing on Ice — For Now

This week’s weakness started with Boston Fed President Susan Collins warning that inflation progress could be derailed if the Fed cuts too soon. She noted the labor market remains strong and that the lack of timely data, thanks to the 43-day government shutdown, makes it harder to justify further easing.

San Francisco Fed’s Mary Daly doubled down, calling it “too early” to commit to another cut, pushing the market toward a more neutral stance. Rate cut odds for December have dropped to 49%, down sharply from 64% earlier this week and 95% a month ago, according to CME FedWatch.

That repricing helped lift the U.S. Dollar Index and keep Treasury yields firm, both of which are headwinds for precious metals. Silver is feeling the pinch — especially after bulls failed to follow through at recent highs.

Technical Picture: Room to Fall Before Support Kicks In

With Thursday’s reversal pattern confirmed, short-term sentiment has flipped bearish. The door is now open for a correction into the $49.97–$48.93 support zone. That’s where dip buyers may try to reassert control and defend the broader bullish structure.

If that level doesn’t hold, the 50-day moving average at $47.42 comes into view — a likely magnet for sellers and a potential spot for bargain hunters.

Bottom Line

Silver’s rally is taking a breather as traders step back to reassess the Fed and wait for cleaner inflation signals. The momentum has cooled, and sellers are probing for weak hands. For now, the path of least resistance points lower, unless buyers show up near $49.00 to form a secondary higher bottom. Until then, rallies are likely to get sold.

More Information in our Economic Calendar.