Silver Price Forecast: XAG/USD keeps downward bias below $55.00 as traders await FOMC

Silver struggles to capitalize on the previous day’s goodish bounce from the YTD low.
Traders now look forward to the FOMC policy decision for some meaningful impetus.
The technical setup suggests that the path of least resistance remains to the downside.

Haresh Menghani FXStreet

Silver (XAG/USD) attracts fresh sellers near the $54.60 region on Wednesday, stalling the previous day's recovery from the $52.70-$52.65 area, or its lowest level since November 2025. The white metal sticks to intraday losses below the $54.00 mark through the early part of the European session as traders now look forward to the outcome of a two-day FOMC meeting.

The US Federal Reserve (Fed) is scheduled to announce its decision later during the US session and is widely expected to keep rates unchanged. Hence, traders will closely scrutinize the accompanying policy statement and Fed Chair Kevin Warsh's comments during the post-meeting press conference for more cues about the policy path. The outlook will drive the US Dollar (USD) and provide a fresh impetus to the XAG/USD ahead of Thursday's important US macro releases – the Advance Q3 GDP report and the Personal Consumption Expenditures (PCE) Price Index.

The two-way price moves since the beginning of this week could be categorized as a bearish consolidation phase following the recent breakdown below a strong horizontal support near the $55.00 psychological mark, which should now act as an immediate strong barrier. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator is turning positive above the zero line, hinting at emerging but still fragile upside momentum, while the Relative Strength Index (RSI) recovers from oversold territory yet remains below the 50 mark, reinforcing a capped tone.

However, a sustained strength beyond the $55.00 mark could trigger an aggressive short-covering move and lift the XAG/USD beyond the $56.00 mark, towards the $56.40 intermediate hurdle en route to $57.00 and the 100-period Simple Moving Average (SMA) on the 4-hour chart. The latter is pegged at $57.55, and bulls would need to reclaim that to ease the broader downside pressure, which should open the door to a more sustained recovery. Nevertheless, the XAG/USD remains vulnerable to further declines while it trades under the $57.55 key barrier.

On the downside, XAG/USD bears might now wait for some follow-through weakness below $53.50 before positioning for further losses to the $53.00 mark, which, if broken, would expose the year-to-date low, around the $52.70-$52.65 zone, touched on Tuesday.

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

XAG/USD 4-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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