Silver Price Forecast: XAG/USD slips below $51.50 ahead of US key economic data
- Silver prices remain sensitive to shifting rate expectations and broader US Dollar momentum ahead of the data.
- Traders turn their focus to upcoming US weekly Jobless Claims, existing home sales, and producer inflation figures.
- Fresh economic releases are expected to provide critical direction on the Federal Reserve’s monetary policy trajectory.
Silver price (XAG/USD) depreciates after posting modest gains in the previous day, trading around $51.40 per troy ounce during the European hours on Thursday. Dollar-denominated Silver falls as a stronger US Dollar (USD) weighs on the precious metal.
The Greenback remains stronger amid growing hawkish sentiment surrounding the Federal Reserve's (Fed) policy outlook, fueled by hotter-than-expected US Consumer Price Index (CPI) inflation data.
Traders have ramped up bets on a December rate hike after Fed Governor Christopher Waller indicated earlier this week that he would support a quarter-point increase, or even a half-point move if inflation worsens. According to the CME FedWatch Tool, markets are now pricing in a nearly 91% probability of a December rate hike.
Market participants are now shifting their focus to key upcoming US economic data, including weekly Jobless Claims, existing home sales, and producer inflation figures, for fresh clues on the Federal Reserve’s monetary policy trajectory.
Technical Analysis:
In the daily chart, XAG/USD trades at $51.40, keeping a bearish near-term bias as price remains below both the nine-period and 50-period Exponential Moving Averages (EMAs). This positioning suggests that rallies are being capped by short- and medium-term trend resistance. The 14-day Relative Strength Index (RSI) at 38.21 sits below the 50 line, hinting at persistent downside pressure rather than oversold exhaustion, while the elevated FXS Fed Sentiment Index at 145.61 reinforces a backdrop of tightening policy expectations that continues to weigh on silver prices.
On the topside, immediate resistance emerges at the nine-period EMA at $51.99, with a more substantial barrier at the 50-period EMA near $57.29, where any recovery would likely struggle unless momentum improves. Beyond these technical caps, the FXS Fed Sentiment Index level at 145.61 underscores the macro headwind environment for XAG/USD. On the downside, momentum support is implied by the RSI region around 38.21, where previous dips have slowed, though a clear structural price floor is not visible in the current dataset, leaving the metal vulnerable to further declines if $51.35 gives way.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.