Silver (XAG) Forecast: Will the 50-Day Moving Average at $44.80 Stop the Selling?
LONDON (October 28) Silver (XAG/USD) extended its slide for a third straight session Tuesday, falling to a three-week low of $45.55 as safe-haven demand retreated. Risk-on sentiment ahead of Wednesday’s Federal Reserve meeting and easing U.S.-China trade tensions pushed traders out of defensive assets and into equities. The pullback mirrored losses in gold, which fell over 2% and broke below critical support zones, adding pressure to silver prices.
The metal is now approaching its 50-day moving average at $44.80. A technical bounce is possible from this level, but if selling continues, the market may revisit the original breakout zone at $44.22. Below that, liquidation could extend toward the 50% level at $41.40 — a deeper retracement marker.
Gold Breakdown and Fed Uncertainty Amplify Selling
Sentiment across metals markets deteriorated Tuesday after gold broke below its $4100.43 pivot and key swing supports at $4004.28 and $3944.43. That drop was driven by optimism around U.S.-China trade progress and strong risk appetite in Asian equity markets, following new mineral supply deals in the region.
Despite expectations for a rate cut on Wednesday, traders are positioning defensively ahead of Chair Powell’s guidance. A more hawkish-than-expected tone could pressure precious metals further, while dovish messaging may open room for short-term reversals.
Long-Term Drivers: Supply Deficits and Industrial Demand
Silver remains fundamentally supported. Year-to-date, it has gained 65% and hit a record high of $54.47. Analysts have lifted their average price forecasts to $38.45 for 2025 and $50 by 2026, citing chronic supply deficits and increasing demand from solar power, electric vehicles, and AI data center expansion.
As a dual-purpose metal — both industrial and monetary — silver continues to attract investor flows as a lower-cost alternative to gold in bullish metals environments.
Short-Term Forecast: Technical Rebound Possible, But Risk Skewed Lower
Daily Silver (XAG/USD)
In the near term, silver remains vulnerable unless bulls defend the $44.80–$44.22 support zone. A failure there opens the door to $41.40. However, if buyers step in and trigger a bounce from this area, the retracement level at $50.02 — now acting as trailing resistance — comes back into focus. That level represents the midpoint between the recent $54.49 high and current lows, and may cap any rebound attempts barring a clear dovish pivot from the Fed.
FXEmpire
