Silver Price Forecast: XAG/USD retreats below $50 as turmoil grips US bond markets

• Silver price slips back below $50.00 as US bond sell-off deepens.
• An almost 5.5% rise over the past two trading days has taken 10-year US Treasury yields to nearly 5.13%.
• A December Fed interest rate rise is a certainty, according to the CME FedWatch tool.

Accelerating inflationary pressures are fuelling expectations of aggressive near-term monetary tightening by the Federal Reserve (Fed), prompting heavy selling in United States (US) bond markets. Against this backdrop, Silver (XAG/USD) has surrendered its modest early advance during Friday’s European session, slipping below $50.00 as its broader decline resumes.

An almost 5.5% increase over the past two trading days has left 10-year US Treasury yields holding near a three-week high of $5.13% at the time of writing.

In theory, the appeal of non-yielding assets such as Silver weakens as returns on US interest-bearing assets rise.

US Treasuries remain under pressure after inflation surprise

The latest US inflation figures were the main catalyst for the day’s market movements, according to strategists at Deutsche Bank: “that US CPI print drove the biggest moves of the day, with the monthly core CPI print for October above consensus at +0.30% (vs. +0.2% expected).” Emphasising the persistence of the increases, they note that “it was the third consecutive month with core CPI at +0.3%, and if you take those three months together, the annualised pace for core CPI is running at +3.75%.” In Deutsche Bank’s assessment, “that’s the fastest pace on that measure since April 2024, so it made it increasingly difficult to dismiss this as a blip.”

Headline inflation was stronger still, the bank notes: “meanwhile, the headline CPI numbers were faster still, with monthly headline CPI at +0.35% (vs. +0.3% expected), with the 3-month annualised pace at +5.72%.” Describing the market response, Deutsche Bank adds that “for markets, the clearest impact could be seen in US Treasuries, with yields surging across the curve.”

Traders have also increased their bets on a more hawkish Fed as US inflation climbs. The CME FedWatch tool indicates certainty of an interest rate increase at the December meeting, including a 10% probability of a 50 basis points (bps) rise.

Silver Remains Bearish Below Key EMA

Trading at $49.87 on the daily chart, XAG/USD retains a bearish short-term bias below its 20-period exponential moving average (EMA) of $53.08. With spot prices beneath this near-term trend indicator, rallies appear constrained for now. Meanwhile, a Relative Strength Index (RSI) reading of 34.76, below the neutral 50 threshold, points to continuing selling pressure rather than a decisive recovery from oversold conditions.

The 20-day EMA, around $53.08, provides immediate resistance on the upside. Only a sustained move above it would temper the prevailing bearish tone and pave the way for a more constructive recovery. While that barrier remains intact, momentum readings around the lower mid-30s favour corrective rallies within a broader downtrend rather than a lasting reversal.

(The technical analysis of this story was written with the help of an AI tool. Know more.)