Nearly 60% below January peak: Silver Price Forecast as XAG/USD decline deepens

Silver faces its sharpest monthly loss since June as selling spreads across precious metals.
Sellers retain a firm grip on XAG/USD, with prices far below daily moving averages.
An elevated ADX and negative MACD point to a powerful downtrend, even as RSI flags oversold conditions.

Silver (XAG/USD) is down more than 5% on Friday. Its continuing sell-off has taken prices below $50 to the lowest since November 2025. October's loss is on course to reach around 18%, the largest monthly fall since June's 22% decline.

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Weakness extends across precious metals. Gold (XAU/USD) has also slipped beneath $4,000, revisiting levels last recorded in October 2025. Heavy selling has weighed on the sector since the Middle East war broke out in late February. The conflict sent Oil prices sharply higher, putting pressure on major central banks, particularly the Federal Reserve (Fed), to increase interest rates to curb inflation.

Because Silver pays no interest, higher borrowing costs diminish its attraction. Following Wednesday's decision to hold rates at 3.75%-4.00%, traders expect the Fed to deliver another rate increase in December.

Nearly 60% now separates Silver from its January record high near $121. Forced liquidation may also be contributing to the latest decline. A sell-off in technology shares over heavy AI spending has unsettled financial markets, and investors nursing losses in other assets may be selling precious metals to generate cash. Broad US Dollar (USD) strength is adding further pressure.

Technical outlook

The daily chart retains a distinctly bearish bias, with XAG/USD falling further below its 50-day, 100-day and 200-day Simple Moving Averages (SMAs). Now broken at $60, the prevailing descending trend line remains an overhead reference point. Momentum indicators also highlight persistent selling: at 23, the Relative Strength Index (14) is in oversold territory, while the Moving Average Convergence Divergence (MACD) indicator remains negative and below zero. Together with an elevated Average Directional Index (ADX) near 39, these readings suggest that the downtrend remains strong and intact.

Any rebound first faces horizontal resistance at $50, then $55, ahead of the broken trendline area around $60. Close alignment with the 100-day SMA and the 50-day SMA at $61 creates a concentrated resistance zone. Further above, the 200-day SMA at $70.39 serves as a more distant structural ceiling.

Below current prices, horizontal support near $45 is the next level to watch. Stronger selling could extend the losses. Despite the oversold backdrop, a sustained move back above the $50-$55 band would be needed to start relieving near-term bearish pressure.

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

Silver: Common Questions

What attracts investors to Silver?

Historically a store of value and a means of exchange, Silver remains an actively traded precious metal. Gold attracts greater interest, but traders may choose Silver for portfolio diversification, its intrinsic value or its potential to hedge against high inflation. Exposure can take the form of physical coins and bars, or instruments such as Exchange Traded Funds that track Silver's price in international markets.

What drives changes in Silver prices?

Several forces shape Silver prices. Its safe-haven role can lift prices during geopolitical turmoil or fears of a severe recession, though the effect is generally weaker than for Gold. Lower interest rates tend to support Silver because it generates no yield. Dollar movements also matter: Silver is quoted in US Dollars (USD), as reflected in XAG/USD, so a firmer Dollar tends to restrain prices, while a weaker currency is likely to lift them. Investment demand, mining supply and recycling rates are further influences. Silver is much more abundant than Gold.

How does industrial usage influence Silver prices?

With electrical conductivity among the highest of any metal, exceeding both Copper and Gold, Silver has extensive industrial applications, notably in electronics and solar energy. Rising demand can push prices higher; weaker demand tends to pull them lower. Economic conditions in the US, China and India can therefore contribute to 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 also an important influence on pricing.

How closely does Silver track Gold prices?

Gold's direction often guides Silver prices. A rise in Gold typically brings a similar move in Silver, reflecting their shared safe-haven status. To assess their relative valuations, investors may use the Gold/Silver ratio: the number of ounces of Silver equal in value to one ounce of Gold. Some investors may read a high ratio as a sign that Silver is undervalued or Gold overvalued. A low ratio, by contrast, may indicate that Gold is undervalued compared with Silver.