Silver Price Forecast: Why do lower highs still weigh on XAG/USD despite its recent rebound?

• Silver's rally loses steam as the US Dollar and Treasury yields rebound following Wednesday's sharp gains in the metal.
• With XAG/USD trading below the Bollinger midline near $55, the broader outlook retains a bearish bias.
• Selling pressure persists as MACD stays negative and ADX remains elevated, despite RSI's recovery from oversold levels.

Silver's (XAG/USD) upward momentum is fading on Thursday as recovering US Dollar (USD) and Treasury yields limit follow-through buying after the previous day's 5.18% surge. Earlier on Thursday, the white metal touched $53.48, its strongest level since October 29, but subsequently retreated to around $52.79 at the time of writing.

Behind Wednesday’s surge was the Democratic sweep of Congress. Traders wagered that a divided government could restrain fiscal expansion and increase pressure on President Donald Trump to end the war with Iran. Widespread US Dollar weakness followed the result. Meanwhile, sharply falling Oil prices reduced inflation worries and contributed to lower Treasury yields, supporting demand for precious metals.

The Greenback nevertheless remains supported by expectations that the Federal Reserve (Fed) will raise interest rates again in December, creating a hurdle for non-yielding assets such as Silver.

Thursday’s US Initial Jobless Claims data came in at 189K, down from 194K and below the expected 196K. The four-week moving average also eased, moving from 196.75K to 194.75K. For further indications of the Fed’s policy direction, market attention now turns to Friday’s US Nonfarm Payrolls (NFP) report.

Can Silver Shake Off Its Bearish Technical Bias?

Sellers continue to dominate the daily XAG/USD chart, with a succession of lower highs following the brief peak near $70 in late August. Trading remains confined to the lower half of the Bollinger Bands’ volatility envelope. Silver is below the bands’ 20-period Simple Moving Average (SMA), roughly $55, and substantially beneath upper-band resistance near $61.67.

Despite rebounding from oversold levels to around 40, the Relative Strength Index (RSI) (14) has yet to regain its midline. Moving Average Convergence Divergence (MACD) is also slightly negative, suggesting that downward momentum continues even as selling pressure eases modestly. An Average Directional Index (ADX) reading above 40 reinforces the strength of the prevailing trend.

The horizontal floor around $50.00 offers immediate downside support, followed by the lower Bollinger Band near $48.40. Should the sell-off deepen, volatility support could materialise at that lower band. For a recovery, the first resistance is the Bollinger midline at about $55.04. A sustained move above this hurdle would be needed to clear a path towards upper-band resistance around $61.67, where sellers are likely to regain control.

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