Silver Price Forecast: Descending channel keeps XAG/USD confined

• A weekly decline of over 5% looms for Silver as expectations of a Fed rate hike underpin the US Dollar.
• Below its major moving averages, XAG/USD continues to trade within a descending channel on the daily chart.
• Momentum looks subdued, with RSI close to 33 and MACD histogram bars shrinking.

A weekly fall of more than 5% is in prospect for Silver (XAG/USD), which slips below $50 again on Friday as traders anticipate more aggressive Federal Reserve (Fed) tightening over the coming months. The metal is trading at around $49 at the time of writing, only slightly above the year-to-date low of $48.87 reached on 30 October.

December’s rate hike is now fully priced in following this week’s US consumer and producer inflation releases and hawkish comments from the Fed, according to the CME FedWatch Tool. Traders favour a quarter-point increase, though they assign a small probability to a half-point rise. Meanwhile, the US Dollar Index (DXY) stands close to 103.40, its strongest level since April 2025. The 10-year US Treasury yield has climbed back above 5%, gaining about 30 basis points this week.

For buyers paying in other currencies, a firmer US Dollar increases the cost of Silver. Rising Treasury yields also make holding the non-yielding metal less attractive by increasing its opportunity cost. Buyers remain largely absent, while technical indicators likewise signal subdued momentum.

Silver remains under technical pressure

A clearly defined descending parallel channel continues to contain XAG/USD’s decline on the daily chart, with the price below every major moving average. Overhead resistance from the 21-day simple moving average (SMA), the 100-day SMA and the 200-day SMA maintains the near-term bearish bias for as long as the price stays beneath these successive barriers.

At close to 33, the 14-day Relative Strength Index (RSI) sits just above oversold territory, indicating that momentum is still subdued. Although the Moving Average Convergence Divergence (MACD) is slightly positive, its diminishing green histogram bars indicate that the recent improvement in momentum is fading.

Any advance would first encounter resistance at the psychological $50.00 level. Beyond that, the descending channel’s upper boundary near $52.17 and the 21-day SMA at $53.06 create a concentrated supply zone ahead of the next obstacle at $55.00. Further resistance lies at the 100-day SMA of $60.27, followed by a horizontal barrier at $62.50. Above these, the 200-day SMA at $68.13 provides the long-term ceiling underpinning the wider bearish structure.

The next significant support on a further decline lies around $45 at the channel’s lower boundary. A decisive break below it would clear the path for the established downtrend to extend.

(An AI tool assisted in preparing this article’s technical analysis. Find out more.)