$52.34: Silver hits fresh yearly lows amid hopes of further Fed tightening
- XAG/USD accelerates its downtrend and hits fresh 2026 lows below $52.50.
- Precious metals struggle on Thursday as markets bet on a Fed rate hike in December.
- The Fed left its monetary policy unchanged on Wednesday and reaffirmed its commitment to bring inflation to target.
Silver (XAG/USD) accelerated its downtrend on Thursday, with bears pushing against the floor of the yearly trading range at the $52.60 area. The XAG/USD pair has reached fresh year-to-date (YTD) lows at $52.34 so far, with precious metals struggling after Wednesday’s Federal Reserve (Fed) meeting reaffirmed hopes of further monetary tightening in December.
The Fed left its monetary policy unchanged as widely expected, awaiting further insight into the economic impact of September’s rate hike. Chairman Kevin Warsh refused to give any clue about December's meeting but reiterated the bank's commitment to get inflation down, which has been seen as a sign that more interest rate hikes are in the pipeline.
Futures markets are pricing in an 83% probability of a quarter-point rate hike in December, practically unchanged after the Fed meeting and up from the 77% chance observed last week. This sentiment is keeping the US Dollar moderately bid, and precious metals on their back foot for now.
Technical Analysis: Next support is at the channel's bottom around $51.85
XAG/USD trades at $52.36 at the time of writing, keeping a bearish near-term tone as price holds just above the base of the downtrend channel from late August lows. Momentum indicators on the 4-hour chart support the bearish view, as the Relative Strength Index (14) hovers just above oversold territory, and the Moving Average Convergence Divergence (MACD) has slipped slightly below zero.
A clear break of the mentioned channel bottom, in the area of $51.85, would expose the $50.00 psychological level and the late November 2025 low, at the $48.65 area. Further decline is unlikely, considering the current tame US Dollar Index (DXY) upside traction.
On the topside, initial resistance remains at the previous YTD lows around $54.85, ahead of the confluence between the channel top and last week's trading top, in the $58.50 area.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
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