Silver Price Forecast: XAG/USD pares losses as firm US Dollar limits gains

• A fresh year-to-date low near $52.67 gives way to a partial recovery in Silver.
• A firm US Dollar continues to weigh on Silver prices.
• The Fed’s policy decision, flash Q3 GDP and September PCE Price Index figures are in focus for investors.

A new year-to-date (YTD) low near $52.67 has been followed by a partial rebound in Silver (XAG/USD), although the metal remains 1% lower at around $53.45 during Tuesday’s European session. A resilient US Dollar (USD) continues to weigh on Silver ahead of Wednesday’s monetary policy announcement from the Federal Reserve (Fed).

At the time of writing, a 0.2% advance has taken the US Dollar Index (DXY) to around 102.25, its highest reading in 10 days. The index measures the Greenback against six major currencies. From a technical perspective, Dollar strength makes Silver less attractive to investors on a risk-reward basis.

Fed set to hold rates as markets seek December hike guidance

Near-term expectations for unchanged rates are supported by Fed funds futures. Commerzbank analysts say the Fed is "widely expected to leave its policy rate unchanged at 3.75-4.00% on Wednesday, following September's 25bp increase," consistent with that futures-market outlook.

Expectations of only modest further tightening over the longer term are reflected in futures pricing. The analysts point out that "the Fed funds futures are pricing in no change this week, a total hike of 22bp by end-2026, and a total hike of 69bp by end-2027," illustrating the limited scale of additional increases anticipated. Commerzbank therefore argues that "the markets will look for the Fed's guidance on the likelihood of a hike in December," with investors weighing whether stubbornly high inflation and forthcoming US releases could prompt the FOMC to act again later in the year.

Thursday’s releases will also command investors’ attention this week, with preliminary Q3 Gross Domestic Product (GDP) and September’s Personal Consumption Expenditure (PCE) Price Index both due.

Silver Remains Under Technical Pressure

At $53.42 on the daily chart, XAG/USD remains well beneath its 20-day exponential moving average (EMA) of $57.82, leaving the short-term outlook bearish. The substantial distance below this dynamic resistance points to continued downward pressure. Meanwhile, a Relative Strength Index (RSI) reading of 30.22 sits close to oversold territory: sellers retain control, although the latest decline is beginning to appear stretched.

Any recovery would first encounter resistance at $54.77, the low recorded on 17 July, followed by the 20-day EMA at $57.82. A move back above that average would be needed to temper the bearish outlook and allow a more substantial recovery. Further losses, meanwhile, could take the asset towards $50.00.

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