Silver (XAG) Forecast: Eyeing 50-Day Moving Average for Breakout or Breakdown

Silver Treads Water as Traders Weigh Technical Pressure and Trade Talk Tailwinds

Silver traded slightly higher on Friday, but gains remained capped beneath the 50-day moving average at $32.70, a level acting as short-term resistance. With markets digesting a mix of technical weakness and global trade developments, traders are staying cautious, searching for direction ahead of key events.

At 12:18 GMT, XAG/USD is trading $32.58, up $0.11 or +0.34%.

Technical Pressure Mounts Under Lower Highs

The silver chart is beginning to reflect a shift in tone, with two clear lower highs set at $33.70 and $33.25 following the primary top at $34.59. This signals seller control in the short-term, especially as price remains below the 50-day moving average. Key support sits at $32.19, and a decisive break lower opens the door to the 50% retracement level at $31.45, followed by the 200-day moving average at $31.20. Until buyers reclaim $32.70, upside attempts are likely to be sold into.

Trade War De-escalation Could Aid Industrial Demand

While the technicals lean bearish, broader fundamentals could offer support. Ongoing U.S.-China trade talks in Switzerland are being closely watched. Any easing of tariffs on Chinese imports could bolster industrial demand for silver, which sees over 50% of its consumption tied to industrial applications, particularly electronics and solar. A de-escalation scenario would be constructive for silver prices, potentially softening the bearish bias from the charts.

Gold/Silver Ratio Hints at Relative Silver Weakness

The gold/silver ratio remains elevated, reinforcing the perception of relative underperformance in silver compared to gold. With gold holding above short-term pivot levels supported by dollar softness and geopolitical concerns, silver has lagged in attracting safe-haven flows. Unless silver sees a decisive break above resistance levels, this spread is likely to persist.

Short-Term Forecast: Cautious Bearish Bias Until Reclaim of $32.70

The near-term outlook for silver leans bearish, with rallies likely to stall unless price can close above the 50-day moving average at $32.70. A downside break through $32.19 would confirm weakness, opening the door to deeper retracement levels at $31.45 and $31.20. That said, any progress on trade de-escalation could shift sentiment and revive industrial demand. Traders should watch for developments out of the U.S.-China talks as the next potential catalyst for a shift in tone.

More Information in our Economic Calendar.