Silver Price Forecast: XAG/USD slides further below $54.00, fresh YTD low and counting

Silver adds to the previous day’s heavy losses and weakens below the $54.00 mark on Friday.
The bearish technical setup backs the case for an extension of a two-month-old downtrend.
Any attempted recovery could be sold into and remain capped near the $58.00 round figure.

Haresh Menghani FXStreet

Silver (XAG/USD) drops to its lowest level since November 2025 during the Asian session on Friday, with bears now looking to extend the downward momentum below the $54.00 mark. Meanwhile, the white metal remains on track to register heavy losses for the second straight week, and the technical setup suggests that the path of least resistance remains to the downside.

The XAG/USD holds well below the 200-day Simple Moving Average (SMA). Moreover, this week's failures to find acceptance above the $58.00 mark, representing the 38.2% Fibonacci level of the May-July downfall, validate the negative outlook. Adding to this, the Moving Average Convergence Divergence (MACD) indicator stays below zero with its latest reading at -0.34.

However, the Relative Strength Index (RSI) hovers near the oversold boundary at 31.53, hinting that downside momentum is still dominant but may be approaching exhaustion rather than fresh impulsive selling. Hence, it will be prudent to wait for a sustained break below the $54.00 mark before positioning for an extension of the downtrend witnessed over the past two months or so.

On the topside, immediate resistance is defined by the $55.50 horizontal zone, above which the XAG/USD could attempt to conquer the $58.00 mark. This is followed by the $60.00 psychological mark, the $61.50-$61.55 region, and the 23.6% Fibo. level, near $63.00. The XAG/USD needs to clear these hurdles 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 daily 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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