Silver (XAG) Forecast: Will Bears Push Prices to the 200-Day MA at $31.31 Next?

Silver Drops Below Key Support – Is $31.31 the Next Stop?

Silver prices extended their retreat on Friday, with sellers pressing the metal below key technical levels as broader market sentiment favored risk assets. After struggling to hold gains earlier in the week, silver’s failure to recover above its 50-day moving average at $32.82 is weighing on the outlook. Traders are increasingly watching for follow-through to the downside.

At 12:30 GMT, XAG/USD is trading $31.95, down $0.69 or -2.11%.

50-Day Moving Average Capping Gains

The 50-day moving average has emerged as a strong resistance zone, with price action repeatedly rejected near $32.82. This level capped intraday upside on Friday, reinforcing near-term bearish momentum. Silver also fell below a critical Fibonacci pivot at $32.19, shifting the market into a technically vulnerable position.

The break below $32.19 opens the door for a move toward the 50% retracement level at $31.45. Additional downside risk lies at the 200-day moving average, currently sitting at $31.31. These zones represent the next logical targets if bearish momentum continues into the close.

Dollar Strength and Risk-On Mood Pressure Precious Metals

Broader market forces are adding weight to silver’s downside risk. A stronger U.S. dollar, poised for a fourth straight weekly gain, is curbing appetite for dollar-denominated metals. Meanwhile, improving sentiment tied to the U.S.-China trade truce is steering investors away from traditional safe-haven assets like silver and gold.

While some inflation data has cooled, suggesting the potential for Federal Reserve rate cuts later this year, that supportive tailwind for silver remains secondary for now. Risk appetite and dollar strength continue to dominate trader attention.

Market Closing Reaction Will Be Key

The tone into Friday’s close remains critical. If traders fail to reclaim the 50-day average at $32.82, it may confirm a near-term top and reinforce the bearish setup. Conversely, a late-session recovery could soften downside pressure, though broader technical and macro signals currently favor sellers.

Silver Outlook: Downside Bias Below $32.19

Silver’s technical breakdown below the Fibonacci pivot and continued failure at the 50-day average suggests further downside in the short term. If the market doesn’t reclaim $32.82 soon, bears could target the $31.45-$31.31 support zone next. Unless sentiment turns sharply or the dollar pulls back, silver appears vulnerable heading into next week.

More Information in our Economic Calendar.