$54.77 YTD lows in sight: Silver Price Forecast as XAG/USD breaks down

Over 3% lower: XAG/USD reaches Thursday’s session lows below $56.00
Rising Oil prices keep precious metals under pressure.
$54.77 year-to-date low comes into focus for bears.

Silver (XAG/USD) fell below $56.00 to session lows on Thursday. A sharp reversal from the $58.00 area marked a resumption of its broader downtrend. Higher Oil prices are weighing on precious metals on Thursday, encouraging Silver bears to challenge the year-to-date (YTD) lows at $54.77 again.

Reports that Israel is considering fresh attacks on Iran after the US midterm election gave Crude prices another lift on Thursday. Renewed strikes would further complicate efforts to negotiate an end to the conflict.

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Attacks on Saudi Arabia by the Iran-backed Houthis have also intensified. Reports of a drone strike on Aframco’s Shaybah Oil field that killed two people have revived fears of disruptions to Saudi Oil supplies. After gaining more than 2% over the previous two days, Brent Crude is trading above $108.00 per barrel at the time of writing. That leaves it close to the five-month highs of $109.37 reached in mid-May.

$54.77: 2026 low in focus for bears in technical analysis

At $56.20, XAG/USD remains inside a broad descending channel as momentum indicators point to strengthening bearish momentum. Around 36, the 4-hour Relative Strength Index (14) signals persistent selling pressure but is not at oversold extremes. The Moving Average Convergence Divergence (MACD), meanwhile, has moved below zero, indicating that rebounds remain vulnerable within the established downtrend.

The first support zone spans last week’s lows at $55.10 and the previously noted 2026 low of $54.77. Below this area, the lower boundary of the bearish channel drawn from the August highs currently lies around $53.65.

The recent trading range’s upper limit, around $58.501, provides initial resistance. Beyond it, the descending channel’s upper boundary near $60.35 offers a second ceiling before the early October highs around $62.00.

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

Silver: key questions

Silver investment: motivations and routes

Investors actively trade Silver, a precious metal historically used both to preserve value and to facilitate exchange. Gold attracts more interest, but traders may choose Silver for portfolio diversification, its intrinsic value or its potential to hedge against high inflation. Investment routes include physical coins and bars, as well as instruments such as Exchange Traded Funds that track Silver’s price in international markets.

Silver prices: principal drivers

A broad set of influences shapes Silver prices. Its safe-haven appeal can lift prices during geopolitical instability or concerns over a severe recession, though the effect is less pronounced than for Gold. Lower interest rates generally support Silver because it pays no yield. Pricing in US dollars (XAG/USD) also makes the US Dollar’s (USD) performance important: a stronger Dollar tends to restrain Silver, while a weaker Dollar is likely to lift it. Investment demand, recycling rates and mining supply also matter, with Silver far more abundant than Gold.

Industrial demand: implications for Silver prices

Among metals, Silver has one of the highest levels of electrical conductivity, exceeding both Copper and Gold. This makes it widely used in industry, notably electronics and solar energy. A jump in demand can push prices higher, whereas weaker demand tends to depress them. Economic developments in the US, China and India can also drive price fluctuations. Large industrial sectors in the US and especially China consume Silver in a range of processes, while Indian consumer demand for Silver jewellery is another important influence on pricing.

Gold moves and the Gold/Silver ratio

Gold’s price movements generally set the direction for Silver. Their similar safe-haven status means that gains in Gold are typically accompanied by gains in Silver. To assess their relative valuations, investors may use the Gold/Silver ratio, which measures how many ounces of Silver equal the value of one ounce of Gold. A high reading may be interpreted by some investors as a sign that Silver is undervalued or Gold overvalued. A low reading, by contrast, might indicate that Gold is undervalued against Silver.