Silver Price Forecast: XAG/USD rebounds sharply as oil prices suffer heavy losses

• $50.35 in sight as Silver rebounds sharply amid a further oil price correction.
• US mid-term elections and major US economic releases take centre stage for investors.
• 72.0% is the expected probability of Democrats securing control of the Senate.

Silver (XAG/USD) has gained 2.45%. Trading near $50.35 during Monday’s European session, the metal is recovering sharply from Friday’s fresh low of $48.86, its lowest level in almost a year. The rebound comes as oil prices extend their correction.

WTI Oil has retreated to just below $100 at the time of writing, down from the five-month high of $104.03 reached on Friday.

With oil becoming cheaper, concerns over accelerating global inflationary pressures are easing. This could temper expectations that central banks will maintain monetary tightening for an extended period, benefiting non-yielding assets such as Silver.

Pressure on oil followed indications from the United States (US) that it favours a diplomatic solution with Iran over renewed military strikes.

Attention now turns to the US mid-term elections and major US economic releases. Nonfarm Payrolls (NFP), in particular, could influence expectations for the monetary policy outlook of the Federal Reserve (Fed).

US midterms: Close Congress race to shape fiscal outlook

Looking ahead to the week’s events, Deutsche Bank strategists say “tomorrow’s midterms will determine control of Congress for the final two years of President Trump’s term.” In their assessment, current polling “suggests Democrats are favoured to gain the three seats needed for a House majority, while the Senate remains a much closer contest,” and the result in either chamber could take “several days to become clear if the margins are tight.”

Deutsche Bank summarises market-implied odds as follows: “Polymarket currently put the probability of the Democrats taking the Senate at 72.0%. Well renowned pollster Nate Silver currently suggests a 75% probability.”

On the immediate fiscal outlook, Deutsche Bank economists warn that “the lame-duck session after the election could prove at least as consequential as the composition of the new Congress,” citing “government funding expiring on December 11 and Republicans likely to seek a reconciliation bill that could include additional defence spending and potentially address the debt limit.”

Silver Technical Outlook

At $50.35 on the daily chart, XAG/USD remains firmly below its 9-day Exponential Moving Average (EMA) of $53.02, keeping the near-term bias bearish. This dynamic overhead barrier continues to weigh on the metal. Meanwhile, the Relative Strength Index (RSI) reads 28.90, placing it in oversold territory. The reading points to stretched downside momentum, but not yet a decisive reversal.

The 9-day EMA near $53.02 provides the first resistance level. Only a sustained move above it would alleviate the prevailing bearish tone. Below the current price, the dataset offers no nearby structural floor. However, an oversold RSI near 28.90 indicates that sellers may become less committed on further declines. That could moderate the fall without defining a clear support area.

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