Below $55.00: Silver Price Forecast stays bearish on XAG/USD with traders awaiting FOMC

Silver’s solid rebound from its YTD low the previous day fails to gain traction.
The FOMC policy decision is the next focus for traders seeking a meaningful catalyst.
Further losses remain the more likely direction, according to the technical picture.

Near $54.60, Silver (XAG/USD) faces renewed selling on Wednesday. This halts the previous day’s recovery from the $52.70-$52.65 area, its lowest level since November 2025. Early in the European session, the metal remains below $54.00 with intraday losses intact. Attention is now on the outcome of the two-day FOMC meeting.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

An unchanged rate decision is widely anticipated when the US Federal Reserve (Fed) announces its policy later in the US session. Traders will therefore examine the accompanying statement and Fed Chair Kevin Warsh’s remarks at the post-meeting press conference for further guidance on the policy path. That outlook will shape the US Dollar (USD) and give XAG/USD fresh direction before Thursday’s key US economic releases: the Advance Q3 GDP report and the Personal Consumption Expenditures (PCE) Price Index.

Following the recent break below strong horizontal support around the psychological $55.00 level, this week’s two-way trading could represent bearish consolidation. That former support should now provide an immediate, strong barrier. The Moving Average Convergence Divergence (MACD) indicator, however, is turning positive above the zero line, signalling nascent but fragile upward momentum. Although the Relative Strength Index (RSI) has recovered from oversold territory, it is still below 50, reinforcing the limited upside bias.

Sustained trading above $55.00 could nevertheless prompt aggressive short covering. XAG/USD could then advance past $56.00 towards the intermediate resistance at $56.40, followed by $57.00 and the 100-period Simple Moving Average (SMA) on the 4-hour chart. At $57.55, that average is the level bulls need to recapture to relieve broader downward pressure and allow a more sustained recovery. Until this key $57.55 barrier is cleared, however, XAG/USD remains exposed to further losses.

Before positioning for another decline, XAG/USD bears may await further weakness below $53.50. The next downside target would be $53.00. A break there would bring Tuesday’s year-to-date low, around the $52.70-$52.65 zone, into view.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

4-hour chart: XAG/USD

Silver: Key Questions

Silver’s Role in Investment Portfolios

Investors trade Silver extensively as a precious metal with a long history as both a store of value and a means of exchange. Gold is more popular, but Silver may appeal to traders seeking portfolio diversification, intrinsic value or a potential hedge against high inflation. Physical exposure is available through Silver coins and bars. Investors can also use instruments such as Exchange Traded Funds that follow its price in international markets.

Key Drivers of Silver Prices

A broad set of influences can drive Silver prices. Its safe-haven appeal can lift prices during geopolitical instability or concerns over a severe recession, though the effect is weaker than for Gold. Lower interest rates also tend to support Silver because it pays no yield. With the metal quoted in dollars (XAG/USD), movements in the US Dollar (USD) are another important driver: Dollar strength generally restrains Silver prices, while weakness is likely to lift them. Investment demand, mine supply and recycling rates also matter. Silver is far more abundant than Gold.

Industrial Demand and Silver Prices

Among metals, Silver has one of the highest levels of electrical conductivity, exceeding both Copper and Gold. This supports extensive industrial use, notably in electronics and solar energy. Rising demand can push prices higher; falling demand tends to weigh on them. Economic developments in the US, China and India can also cause price fluctuations. Large industrial sectors in the US, and especially China, use Silver across various processes. In India, consumer demand for Silver jewellery is another important price-setting influence.

Gold’s Influence on Silver Prices

Gold’s price direction generally guides Silver, with gains in Gold typically accompanied by a rise in Silver because both metals share similar safe-haven characteristics. Their relative valuations can be assessed using the Gold/Silver ratio, which measures how many ounces of Silver equal the value of one ounce of Gold. A high ratio may signal to some investors that Silver is undervalued or Gold overvalued. A low reading, by contrast, may indicate that Gold is undervalued against Silver.