Silver price prediction: XAG/USD correction deepens as investors rotate into equities

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Silver price prediction

Highlights

- Silver drops 9% over three days, breaking bullish structure and testing the 20-day EMA support.

- RSI near 60 shows momentum cooled, setting stage for renewed dip-buying interest.

- Stronger dollar and equity optimism weigh on silver while safe-haven demand lingers.

The selloff started late last week after silver touched an all-time high at $54.46. Increased trading volume during that period confirmed a surge in profit-taking and produced a bearish engulfing candle, which hinted that overbought conditions were beginning to unwind. Monday’s modest recovery attempt was rejected at the 20 EMA on the 4-hour chart near $52.6, reinforcing the level as short-term resistance. The 50 EMA at $51.4 provided temporary support in early European trade but failed to hold as sellers intensified pressure.

Silver price dynamics (Sept - Oct 2025). Source: Tradingview

Price eventually found stability near the 20-day EMA around $49.2, a level that has cushioned several pullbacks during the broader bullish cycle. The correction has helped ease the overbought signals that built up during October’s rally. RSI readings on the daily timeframe have cooled to around 60, showing that bullish momentum is intact but no longer stretched. This technical adjustment may create a foundation for dip buyers to re-enter the market if price sustains above the 20-day EMA.

Dollar rally pressures silver as traders unwind leveraged silver positions

From a fundamental standpoint, the retracement reflects renewed strength in the U.S. dollar, which has extended its short-term uptrend for a third session. The dollar’s rise has weighed on commodities priced in USD, while expectations for additional Fed rate cuts have already been priced into the market. That combination has limited fresh bullish momentum in silver. Positive sentiment across equity markets has also drawn investors away from safe-haven assets, encouraging short-term profit-taking.

Even so, several macro factors could temper further downside. Concerns that a prolonged U.S. government shutdown may hinder economic growth could soften the dollar’s rally, providing support for silver. Trade-related uncertainties also continue to linger, leaving room for renewed demand in safe-haven metals. Overall, silver’s longer-term uptrend is still intact, though buyers will need to defend the $49.0 region to prevent deeper losses toward $47.5.

We discussed silver consolidating below its record high, reflecting trader indecision after a nine-week rally. Fed rate cut expectations and tariff tensions sustained silver’s medium-term bullish bias.

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