Below $53.00: XAG/USD holds near YTD low with RSI oversold | Silver Price Forecast

Below $53.00, Silver extends its decline as the recent breakdown regains momentum.
With the RSI oversold, bearish traders may hesitate to position for additional losses.
Above $53.00, any recovery attempt is likely to face selling pressure that limits further gains.

Silver (XAG/USD) is down around 2.0% on the day. Trading below $53.00 in Tuesday’s early European session, the metal retains its intraday losses after renewed selling drove it to its lowest level since November 2025. The decline follows a nearly unchanged close the previous day.

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A third consecutive day of US Dollar (USD) gains is weighing on dollar-denominated commodities, including XAG/USD. The currency is extending its rebound from the three-week low reached last Thursday. However, with Wednesday’s highly anticipated FOMC rate decision approaching, USD bulls may wait rather than take aggressive positions. Such restraint could provide some support for Silver and contain further declines.

Repeated recent failures to hold above the 50-hour Simple Moving Average (SMA) and the $54.00 round level preceded the latest decline. Technically, this leaves bearish traders with the advantage and indicates that the downside remains the path of least resistance for XAG/USD. Adding weight to that assessment, the Moving Average Convergence Divergence (MACD) (12, 26, 9) remains below zero with a weak profile.

At 27.89, however, the Relative Strength Index (RSI) is in oversold territory. This suggests that selling momentum may be fading at these lower levels, even as downward pressure continues. A rebound above $53.00 would nevertheless be more likely to draw fresh selling, with gains limited near horizontal resistance at $53.25. Sustained trading above that level could set up a retest of the 500-hour SMA, now around $54.00.

Reclaiming $54.00 would be necessary to soften the prevailing bearish bias and create scope for higher prices. Conversely, nearby technical support is absent. A further drop below the $52.70-$52.65 area could therefore accelerate towards intermediate support at $52.50, followed by $52.00, where buyers may step in.

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

1-hour chart: XAG/USD

Silver: Frequently Asked Questions

What attracts investors to Silver?

Historically a store of value and a means of exchange, Silver remains an actively traded precious metal. It is less popular than Gold, but traders may choose it for portfolio diversification, its intrinsic value or its potential to hedge against periods of high inflation. Exposure can be obtained by purchasing physical coins or bars, or through instruments such as Exchange Traded Funds that follow Silver’s price in international markets.

What drives the price of Silver?

Several forces influence Silver prices. Its safe-haven appeal can lift prices during geopolitical instability or concerns about a deep recession, though the effect is generally smaller than for Gold. Lower interest rates also tend to benefit Silver because it pays no yield. As Silver is quoted in US dollars (XAG/USD), movements in the US Dollar (USD) matter: a stronger currency typically restrains prices, while a weaker one is likely to lift them. Investment demand, recycling rates and mining supply also play a part, with Silver far more abundant than Gold.

Industrial demand: How does it shape Silver prices?

Among metals, Silver has one of the highest levels of electrical conductivity, exceeding both Copper and Gold. This makes it widely used in industrial applications, notably electronics and solar energy. Rising demand can push prices higher, whereas weaker demand tends to bring them down. Economic developments in the US, China and India can also drive 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 and Silver: How closely do prices move?

Given their similar safe-haven status, Silver generally tracks Gold, typically rising when Gold prices advance. To assess their relative valuations, investors may use the Gold/Silver ratio, which measures how many ounces of Silver equal the value of one ounce of Gold. A high reading may be viewed by some investors as a sign that Silver is undervalued or Gold overvalued. A low reading, by contrast, may indicate that Gold is undervalued against Silver.