Silver Price Forecast: XAG/USD slumps nearly 60% from January peak as as downturn deepens
- Silver heads for its steepest monthly decline since June amid broad precious metals selling.
- XAG/USD trades well below daily moving averages, keeping sellers firmly in control.
- RSI signals oversold conditions, while negative MACD and elevated ADX indicate a strong downtrend.
Silver (XAG/USD) extends its decline on Friday, falling more than 5% and breaking below $50 to its lowest level since November 2025. The white metal is on track to lose around 18% in October, its steepest monthly decline since June, when it fell 22%.
The slide comes amid broader weakness in precious metals, with Gold (XAU/USD) also falling below $4,000 to levels last seen in October 2025. Precious metals have faced heavy selling pressure since the Middle East war erupted in late February, pushing Oil prices sharply higher and pressuring major central banks, particularly the Federal Reserve (Fed), to raise interest rates to contain inflation.
Higher borrowing costs reduce the appeal of assets such as Silver, which offers no interest income. Traders anticipate another Fed rate hike in December after the central bank left rates unchanged at 3.75%-4.00% on Wednesday.
Silver now trades nearly 60% below its all-time high near $121 reached in January. The latest leg lower may also reflect forced liquidation as a technology stock sell-off over heavy AI spending unsettles financial markets. Investors facing losses elsewhere may be selling precious metals to raise cash, while a broadly firmer US Dollar (USD) adds to the pressure.
Technical analysis
On the daily chart, XAG/USD extends its slide well below the 50-day, 100-day and 200-day Simple Moving Averages (SMAs), reinforcing a clear bearish bias. The prevailing downward trend line, now broken at $60, remains an overhead reference, while momentum gauges underline selling pressure: the Relative Strength Index (14) at 23 sits in oversold territory and the Moving Average Convergence Divergence (MACD) indicator stays below zero with a negative reading, hinting that the downside trend is both strong and still intact, as supported by an elevated Average Directional Index (ADX) near 39.
On the upside, immediate resistance emerges at the horizontal barrier of $50, followed by $55 before the broken trendline region around $60 comes into play. This region closely aligns with the 100-day SMA and the 50-day SMA at $61, together forming a dense resistance cluster, while the 200-day SMA at $70.39 marks a more distant structural ceiling.
On the downside, next support lies at the horizontal level near $45, with further losses possible if selling pressure intensifies. While the market appears oversold, only a sustained recovery above the $50-$55 band would begin to ease the immediate bearish pressure.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Nothing in this material constitutes investment advice, personal recommendation, investment research, an offer, or a solicitation to buy or sell any financial instrument. The content has been prepared without consideration of your individual investment objectives, financial situation, or needs, and should not be treated as such.
Past performance is not a reliable indicator of future performance and/or results. Forward-looking scenarios or forecasts are not a guarantee of future performance. Actual results may differ materially from those anticipated.
Mitrade makes no representation or warranty as to the accuracy or completeness of the information provided and accepts no liability for any loss arising from reliance on such information.
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