Silver Price Forecast: XAG/USD hangs near YTD low, below $53.00 amid oversold RSI

Silver resumes its recent breakdown momentum and weakens further below the $53.00 mark.
The oversold RSI might hold back bearish traders from positioning for any further depreciation.
Any attempted recovery beyond the $53.00 mark is likely to be sold into and remain capped.

Haresh Menghani FXStreet

Silver (XAG/USD) comes under some renewed selling pressure following the previous day's nearly flat close and declines to a fresh low since November 2025 on Tuesday. The white metal sticks to intraday losses through the early European session, currently trading below the $53.00 mark, down around 2.0% for the day.

The US Dollar (USD) builds on its recovery from a three-week trough, touched last Thursday, and gains positive traction for the third straight day, undermining USD-denominated commodities, including the XAG/USD. USD bulls, however, might refrain from placing aggressive bets and opt to wait for the highly anticipated FOMC rate decision on Wednesday. This, in turn, could offer some support to the commodity and help limit further losses.

From a technical perspective, the latest leg down follows the recent repeated failures to find acceptance above the 50-hour Simple Moving Average (SMA) and the $54.00 round figure. This favors bearish traders and suggests that the path of least resistance for the XAG/USD remains to the downside. The negative outlook is reinforced by the fact that the Moving Average Convergence Divergence (MACD) (12, 26, 9) stays in negative territory with a weak profile.

That said, the Relative Strength Index (RSI) at 27.89 hovers in oversold conditions, hinting that while downside pressure persists, selling may be losing momentum at these lower levels. Any attempted recovery beyond the $53.00 mark, however, is more likely to attract fresh sellers and remain capped near the $53.25 horizontal resistance. A sustained strength above could allow the XAG/USD to retest the 500-hour SMA, currently around the $54.00 mark.

The white metal would need to reclaim the said handle to ease the current bearish tone and open the door toward higher prices. On the downside, the absence of nearby technical support suggests that any further slide below the $52.70-$52.65 region could quickly extend further towards the $52.50 intermediate support en route to the $52.00 mark, where buyers might emerge.

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

XAG/USD 1-hour chart

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

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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