Silver price forecast: $54.89 support in focus as XAG drops 3.53%

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Silver slides 3.53% today to $55.86

Highlights

Recent oil price gains have raised global inflation worries, spurring outflows from non-yielding assets such as silver.
Investors are retreating from silver due to revised inflation expectations, contributing to negative price action and sentiment.
Silver trades below key moving averages and exhibits strong bearish momentum, with an expected range of $54.89 to $56.83 over the next sessions.

Inflation fears drive selling as oil rallies pressure silver

Recent gains in oil prices have heightened concerns about global inflation, leading to increased selling activity in non-yielding assets such as silver, according to FXStreet. The shift in inflation expectations has pressured investor behavior, prompting outflows from commodities that do not offer regular income. This backdrop has contributed to the current market sentiment and observed price action.

Downside momentum intensifies as technical signals turn bearish

On the technical front, XAG/USD is trading below the MA-20 at $57.32 and MA-50 at $57.36 on the H4 chart, with the price also remaining well under the MA-200 at $68.08 on the daily timeframe. The Ichimoku Kijun level at $57.2 sets immediate resistance, while today's price dropped to an intraday low of $55.86. Key momentum indicators including MACD and ADX both register sell signals, and oversold conditions are confirmed by RSI, Stoch RSI, CCI, and Bull/Bear Power. The Awesome Oscillator further aligns with this intraday downtrend, with all indicators showing cohesive downward momentum.

Downtrend likely to persist as volatility bands define risk

Looking ahead to the next 2–3 sessions, XAG/USD is expected to consolidate within a range of $54.89–$56.83, defining the typical volatility band relative to current levels. Scenario analysis indicates that the probability of continued downside is high, while the likelihood of a reversal is very low. A move above $57.2 would open the door to bullish momentum, but a sustained drop below $54.89 would likely increase selling pressure and extend the current downtrend.

Anton Kharitonov, expert at Traders Union, sees mounting selling pressure on silver as technicals confirm prevailing weakness. He notes that higher oil prices have fueled inflation fears, leading investors to shun non-yielding assets like silver. Momentum and sentiment remain firmly bearish, with oversold conditions offering little relief for now. "The trend remains to the downside while XAG/USD trades below $57.2 — for now, caution is warranted and any recovery attempt looks fragile."

Previously it was reported that silver prices had eased in tandem with broader weakness across precious metals, reflecting global market declines. The current technical outlook further strengthens this view, with persistent downside momentum suggesting that traders should closely monitor the $54.89 support level for potential extension of the ongoing downtrend.

Source of Data: XAG Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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