Silver Price Forecast: XAG/USD seems vulnerable near YTD low, as bears await $49.00 break

Silver reverses the previous day’s recovery gains and drops back closer to the YTD low.
The oversold RSI warrants caution for bears and before positioning for further losses.
A sustained strength beyond the 100-EMA is needed to negate the negative outlook.

Haresh Menghani FXStreet

Silver (XAG/USD) comes under renewed selling pressure on Tuesday, reversing the previous day's goodish recovery gains and dropping back closer to its lowest level since November 2025, touched last week. The white metal remains heavily offered through the early European session and currently trades just above the $49.00 mark, down around 2.75% for the day.

From a technical perspective, the XAG/USD retains a clear negative near-term tone as it holds well beneath the 100-hour Exponential Moving Average (EMA) at $51.40. Moreover, the Moving Average Convergence Divergence (MACD) has slipped deeper into negative territory, while the Relative Strength Index (RSI) hovers around 28, hinting at oversold conditions that could slow the downside without yet signaling a firm rebound.

Bearish traders, however, might opt to wait for a sustained break and acceptance below the $49.00 round figure before placing fresh bets and positioning for an extension of the recent well-established downtrend from the August monthly swing low. On the top side, any attempted recovery might now confront an immediate hurdle near the $50.00 psychological mark, which, if cleared decisively, could trigger a short-covering rally.

The subsequent move up could lift the XAG/USD beyond the $50.35 intermediate hurdle en route to the $51.00 mark. Meanwhile, the 100-hour EMA at $51.40 stands as a key resistance. The white metal would need to reclaim the said barrier to ease the prevailing bearish pressure and open the door to a more sustained recovery.

(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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