Silver Price Forecast: XAG/USD Slides Below $70.00 as Bearish Momentum Persists Beneath Key Moving Average

Silver prices continued their downward drift in Tuesday’s trading session, with XAG/USD slipping below the $70.00 mark as technical indicators pointed to sustained bearish pressure. The precious metal remains capped by the 100-day Simple Moving Average (SMA), a level that has acted as resistance since mid-March.

Technical Breakdown: Resistance Holds Firm

The 100-day SMA, currently hovering near $71.20, has proven a stubborn barrier for silver bulls. Repeated attempts to reclaim this level over the past two weeks have failed, reinforcing the bearish bias. The relative strength index (RSI) on the daily chart sits just below 45, indicating that sellers retain control without entering oversold territory — a setup that often precedes further downside.

Immediate support is now seen at the $68.50 zone, a level that held during late February. A break below that could open the door to the $66.00 area, where the 200-day SMA offers the next major floor. On the upside, a decisive close above the 100-day SMA would be needed to shift the near-term outlook back to neutral or bullish.

Macro Factors Weighing on Silver

The broader macro environment has not been kind to precious metals in recent weeks. Rising U.S. Treasury yields and a stronger U.S. dollar, driven by expectations that the Federal Reserve will maintain higher interest rates for longer, have reduced the appeal of non-yielding assets like silver. Additionally, industrial demand — which accounts for roughly half of global silver consumption — faces headwinds from slowing manufacturing activity in China and Europe.

Market participants are now pricing in a 68% probability that the Fed will hold rates steady at its May meeting, according to CME FedWatch data. This rate outlook, combined with sticky inflation readings, has kept real yields elevated, further pressuring silver and gold.

What This Means for Traders

For short-term traders, the current setup favors a cautious approach. The bearish bias under the 100-day SMA suggests that rallies toward $70.50–$71.00 may attract selling pressure. However, silver’s dual role as both a monetary and industrial metal means that any unexpected shift in economic data — particularly a weaker-than-expected U.S. jobs report or a dovish Fed pivot — could trigger a sharp reversal.

Long-term holders may view the current pullback as a potential accumulation zone, especially given silver’s supply deficit and growing demand from solar panel manufacturing and electronics. The Silver Institute projects a fourth consecutive year of structural supply deficits in 2025, which historically supports prices over multi-year horizons.

Conclusion

Silver’s price action remains technically bearish in the near term, with the 100-day SMA capping upside momentum. The $68.50 support level is the key line in the sand for bulls. Until the macro headwinds of a strong dollar and elevated yields ease, silver is likely to remain under pressure. Traders should watch for a catalyst — either a break below support or a reclaim of the moving average — to determine the next directional move.

FAQs

Q1: Why is the 100-day SMA important for silver prices?
The 100-day Simple Moving Average is a widely watched technical indicator that smooths out price data over the past 100 trading days. When silver trades below this level, it signals that the short-term trend is weaker than the medium-term average, often interpreted as bearish momentum.

Q2: What is the main driver of silver’s recent decline?
The primary drivers are a stronger U.S. dollar and rising Treasury yields, which reduce the appeal of precious metals. Additionally, concerns about slowing industrial demand from China and Europe have added downward pressure.

Q3: Is silver a good investment during a supply deficit?
Structural supply deficits can support silver prices over the long term, but short-term price movements are heavily influenced by macroeconomic factors like interest rates and currency strength. Investors should consider their time horizon and risk tolerance.