Silver (XAG) Forecast: Will the 200-Day Moving Average Be Tested as Dollar Strengthens?

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At 12:57 GMT, XAG/USD is trading at $30.40, down $0.22 or -0.71%.

Gold faces dollar pressure; Can the demand for safe havens sustain?

Gold also fell 1% on Monday, reversing four straight sessions of gains. The metal was weighed down by a stronger US dollar, which rose 0.5%, marking its best single-day performance in more than a week. This dollar strength made gold more expensive for holders of other currencies, contributing to a turnaround from last month’s 3% decline – the steepest drop since September 2023. While the dollar’s rise has put pressure on prices, continued central bank purchases and geopolitical tensions provide some support.

Trump’s position on the BRICS creates uncertainty for the markets

Silver and gold faced additional pressure after newly elected US President Donald Trump’s comments this weekend. Trump demanded that BRICS countries pledge not to create or adopt an alternative currency to the US dollar, and warned of 100% tariffs on countries that do not comply. His comments on Truth Social underscored the dollar’s dominance in global trade but increased market uncertainty. The possibility of heightened geopolitical tensions is causing traders to reevaluate safe-haven demand for precious metals.

The metals market is gearing up for a volatile week as investors await Powell’s comments along with key U.S. economic data including ADP’s employment report, job openings data and Friday’s nonfarm payrolls. These reports could set expectations for the Federal Reserve’s upcoming interest rate decision, with major brokers predicting a 25 basis point cut in December.

Outlook for silver and gold prices

The technical outlook for silver remains bearish as it moves between major moving averages. A break above $30.61 could signal a near-term recovery, while failure to hold the support at $29.68 risks a pullback to $29.15. Gold’s safe-haven appeal could limit further downside, but the metal’s direction will depend heavily on dollar strength and Fed policy signals. Overall, precious metals are likely to react sharply to economic data and geopolitical developments this week.

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More information in our Economic Calendar.

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