Silver Price Forecast: XAG/USD breaks lower and nears YTD lows at $54.77

XAG/USD depreciates beyond 3% on Thursday and hits session lows below $56.00
Precious metals remain on the defensive amid the oil price rally.
Bears aim for the year-to-date low at $54.77.

Guillermo Alcala FXStreet

Silver (XAG/USD) has resumed its broader bearish trend on Thursday, to reach session lows below $56.00 after an impulsive reversal from the $58.00 area. Precious metals are struggling on Thursday, weighed by higher Oil prices, which has given confidence to Silver bears to retest the year-to-date (YTD) lows at $54.77.

Crude prices received a fresh boost on Thursday from news reporting that Israel is considering renewing attacks on Iran after the US midterm election, which would further complicate a negotiated end to the conflict.

Meanwhile, attacks from the Iran-backed Houthis against Saudi Arabia have increased. A drone attack on Aramco’s Shaybah Oil field has reportedly killed two people and reactivated concerns about supply disruptions of Saudi Oil. Brent Crude prices have rallied beyond 2% over the previous two days, and trades above $108.00 per barrel as of writing, very close to the five-month highs of $109.37 hit in mid-May.

Technical Analysis: Bears are targeting the 2026 low at $54.77

XAG/USD trades at $56.20, holding within a broad downward channel with momentum indicators showing a growing bearish traction. The 4-hour Relative Strength Index (14) sits around 36, hinting at lingering downside pressure without reaching oversold extremes, while the Moving Average Convergence Divergence (MACD) has dipped into negative territory, suggesting that recovery attempts remain fragile within the prevailing downtrend structure.

Immediate support emerges in the area between last week's lows at $55.10 and the mentioned 2026 low at $54.77. Further down, the bottom of the bearish channel from August highs is now around $53.65.

On the topside, initial resistance aligns the recent range top around $58.501, with the upper boundary of the descending channel near $60.35 acting as a secondary cap, ahead of the early October highs near $62.00.

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

Silver FAQs

Why do people invest in Silver?

Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.

Which factors influence Silver prices?

Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.

How does industrial demand affect Silver prices?

Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.

How do Silver prices react to Gold’s moves?

Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.

Author

Guillermo Alcala

FXStreet

Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.

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