Silver Faces Selling Pressure as Gold Reversal Raises Risks
Silver prices are under pressure after failing to break key resistance, while gold’s sharp reversal from record highs adds another layer of uncertainty. With Federal Reserve Chair Jerome Powell set to address Congress, traders are bracing for potential volatility driven by inflation concerns, trade tensions, and shifting interest rate expectations.
At 11:38 GMT, XAG/USD is trading $31.74, down $0.31 or -0.96%.
Silver Struggles at Resistance, Eyes Key Support Levels
Silver tested a major retracement zone between $31.81 and $32.53 but failed to sustain momentum, signaling potential downside. The market is now straddling the lower boundary, increasing the risk of a drop toward support at $31.17 and $30.69. Further declines could target the 50-day moving average at $30.61 and the 200-day moving average at $30.32.
Silver typically attracts dip-buying interest, especially when economic uncertainty supports safe-haven demand. However, near-term price action remains vulnerable as broader market sentiment shifts.
Gold’s Reversal Puts Pressure on Silver
Gold surged to an all-time high of $2,942.78 before pulling back, raising concerns that the rally had become overheated. The RSI remains in overbought territory, and the price gap between spot gold and its 50-day moving average suggests further downside is possible.
Silver often mirrors gold’s movements, and a deeper correction in gold could accelerate selling in silver. If gold sees a confirmed bearish reversal pattern, silver may struggle to hold its current support levels, especially if technical traders follow gold’s lead and reduce positions.
Powell’s Testimony and Tariff Uncertainty Weigh on Markets
The Federal Reserve’s policy outlook remains a key driver for precious metals. Powell’s Congressional testimony will be closely analyzed for signals on inflation and rate expectations. With inflation still running above the Fed’s 2% target, any indication of prolonged rate stability could strengthen the dollar and pressure silver.
Meanwhile, Trump’s 25% tariffs on steel and aluminum imports have reignited concerns over rising costs. If Powell acknowledges the inflationary risks of tariffs, traders may shift expectations toward a more hawkish Fed, which could negatively impact silver and gold. However, if Powell strikes a cautious tone, emphasizing patience, silver could find renewed support.
Silver Price Outlook: Will Buyers Step In?
Silver’s next move will largely depend on gold’s ability to stabilize and Powell’s testimony. If silver breaks below $31.17, additional losses toward $30.61 or $30.32 could follow. However, if gold finds support and buyers return on dips, silver could attempt another test of resistance at $32.53, with a breakout opening the door to $32.65.
For now, traders should remain cautious, as gold’s pullback and Fed uncertainty create a fragile environment for silver prices.
More Information in our Economic Calendar.