Near $49.00: Silver Price Forecast as XAG/USD hovers around one-year lows amid US political shift

Democratic control of the House signalled by US midterm results weighs on Silver.
The US fiscal policy outlook faces renewed market uncertainty as the political balance shifts.
A December Fed rate rise remains priced in, limiting the modest support that cheaper oil provides to non-yielding Silver.

Silver (XAG/USD) trades at around $49.20 per troy ounce. The metal is extending its decline for a second consecutive day during Wednesday’s Asian session, hovering near the one-year low of $48.62 reached on 3 November. Democrats have secured a majority in the US House of Representatives, wresting control from Republicans. The shift opens the possibility of changes to congressional leadership and adds uncertainty to the outlook for US fiscal policy.

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

Control of Congress for the final two years of US President Donald Trump’s term was at stake as Americans cast their midterm ballots on Tuesday. Live figures from Decision Desk HQ show that 253 of the 435 House races have been called. Democrats have won 152 seats against 101 for Republicans, with 218 required to secure a majority.

Lower oil prices have eased inflation concerns, lending modest support to non-yielding Silver. Crude nevertheless remains close to a four-week low amid mixed signals over US-Iran negotiations. Following reported US airstrikes on Iran’s Qeshm Island, Tehran and Washington are reviewing proposals put forward by mediators. Cheaper energy could temper expectations that monetary tightening will persist. Even so, the CME FedWatch Tool shows markets assigning a 78% probability to a Federal Reserve rate increase in December.

Chart Analysis XAG/USD — XAG/USD: Daily Price Chart

80 gold/silver ratio highlights silver’s underperformance

A gold/silver ratio of 80 highlights silver’s recent relative weakness, according to Commerzbank. The bank describes the metal as “significantly underperforming gold, as reflected in the rise in the gold/silver ratio to 80.” The higher ratio illustrates the scale of silver’s decline relative to gold, underlining that the white metal’s latest downward leg has been notably steeper than the yellow metal’s move.

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

Silver: Frequently Asked Questions

Silver investment: What attracts investors?

Investors actively trade Silver, a precious metal with a long history as both a store of value and a means of exchange. While Gold is more popular, Silver may appeal to traders seeking portfolio diversification, intrinsic value or a potential hedge against high inflation. Exposure can be obtained by purchasing physical coins or bars, or through instruments such as exchange-traded funds that track Silver’s price in international markets.

Silver prices: The main drivers

A broad mix of influences can drive Silver prices. Its safe-haven appeal can lift prices during geopolitical turmoil or when fears of a deep recession emerge, though the effect is typically smaller than for Gold. Lower interest rates generally favour Silver because it pays no yield. Dollar movements also matter: Silver is priced in US Dollar (USD) terms as XAG/USD, so a stronger Dollar tends to restrain prices, while a weaker one is likely to push them higher. Investment demand, recycling rates and mine supply can also influence prices, with Silver far more abundant than Gold.

Industrial demand: Its impact on Silver prices

With electrical conductivity among the highest of any metal, exceeding that of Copper and Gold, Silver has extensive industrial applications, notably in electronics and solar energy. A jump in demand can lift prices; weaker demand generally has the opposite effect. Economic developments in the US, China and India can also generate price fluctuations. Large industrial sectors in the US and, especially, China consume Silver across a range of processes. In India, consumer demand for Silver jewellery is another important influence on prices.

Gold’s moves: The link to Silver prices

Given their similar safe-haven status, Silver generally tracks Gold, typically gaining when Gold prices rise. 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 be viewed by some investors as a sign that Silver is undervalued or Gold overvalued. Conversely, a low reading might indicate that Gold is undervalued compared with Silver.