Silver Price Forecast: XAG/USD slumps to fresh low since November, near $51.00
- Silver attracts sellers for the third straight day and drops to a fresh YTD low on Friday.
- The bearish technical setup backs the case for an extension of the downward trend.
- The RSI is flashing oversold conditions, pointing to the risk of a corrective rebound.
Silver (XAG/USD) extends its descending trend for the third straight day, hitting a fresh low since November 2025 during the Asian session on Friday. The white metal, however, recovers slightly from the $51.00 neighborhood and currently trades near the $51.50-$51.55 region, still down around 1.25% for the day.
From a technical perspective, the decline witnessed over the past month or so has been along a downward parallel channel, which points to a well-established bearish trend. Moreover, momentum indicators hint that sellers have the upper hand despite the risk of short-term corrective bounces amid overstretched conditions.
In fact, the Relative Strength Index (RSI) at 27.21 sits in oversold territory, and the Moving Average Convergence Divergence (MACD) remains negative. Hence, any attempted recovery back above the $52.00 mark is likely to attract fresh sellers near the $52.50-$52.55 region, which, in turn, should cap the XAG/USD near $53.00.
A sustained strength beyond the latter could prompt some follow-through short-covering move, which should allow the white metal to surpass $54.00 and test the channel top near $54.52. This is followed by the 50-period SMA at $54.76. The XAG/USD would need to reclaim that to open the door to a more sustained recovery.
On the downside, a break below $51.00 would make the commodity vulnerable to accelerating the fall towards the $50.00 psychological mark and expose the lower boundary of the channel at $49.07, which forms a more meaningful floor. A sustained break beneath should pave the way toward deeper downside levels.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
XAG/USD 4-hour chart
Silver FAQs
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.
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.
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.
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.
