Silver Price Forecast: XAG Forms Base at $61 and Looks Up Ahead of Powell, NFP
Silver came under heavy pressure in March as macroeconomic forces outweighed its safe-haven appeal, though rising geopolitical tensions are
Quick overview
- Silver prices fell over 15% in March due to unfavorable macroeconomic conditions, breaking key support levels.
- Rising U.S. yields and a stronger dollar have diminished silver's appeal as a safe-haven asset amid expectations of tighter monetary policy.
- Geopolitical tensions, particularly involving Iran and U.S.-China trade relations, are providing some support to silver prices despite ongoing macro pressures.
- The interplay between rising oil prices, inflation concerns, and industrial demand adds complexity to silver's market outlook.
Live SILVER Chart
Silver came under heavy pressure in March as macroeconomic forces outweighed its safe-haven appeal, though rising geopolitical tensions are now helping stabilize prices.
Historic Selloff Hits Silver
Silver experienced a sharp correction, plunging more than 15% in one of the steepest declines in recent years. Prices dropped to around $61 per ounce early last week, where a key support level initially held before breaking as selling pressure intensified.
The magnitude of the decline reflects a rapid shift in investor positioning. After a strong prior rally, markets moved quickly to unwind positions as macro conditions turned less favorable. The breakdown below support highlights how fragile sentiment has become, even for traditional defensive assets.
Macro Pressures Override Safe-Haven Appeal
The primary driver behind silver’s weakness has been the broader macro environment. Rising U.S. yields and a stronger dollar have reduced the attractiveness of precious metals, particularly those like silver that also carry industrial exposure.
Expectations for tighter monetary policy have increased following hawkish signals from Jerome Powell and the Federal Reserve. Higher interest rates raise the opportunity cost of holding non-yielding assets, pushing investors toward income-generating alternatives.
At the same time, upcoming economic events—including Powell’s remarks and key manufacturing data—are expected to further influence rate expectations and currency movements, adding to volatility in silver markets.
Technical Structure Signals Caution
From a technical perspective, silver’s broader uptrend has not been invalidated. The break below $70 on Thursday was significant, but the decline was ultimately contained by key moving averages. Support emerged at the stronger buying interest above the $61 support zone and the 200 SMA (purple) on the daily chart helped as well.
Silver Chart Daily – The 100 SMA Broke As Support
But the 100 SM A(green) acted as resistance at the top after the rebound and sellers returned. However , the trend still remains upward, but buyers will have to push the price above the 100 SMA at around $70 which is a key resistance now, with higher levels sitting near $80, $100 and that is followed by the prior highs around $117–$121. On the downside, initial support is defined by the recent lows near $60, $60 and then $53.
Geopolitical Risks Provide Underlying Support
Despite the selloff, geopolitical tensions are helping to stabilize silver. The ongoing conflict involving Iran has increased demand for safe-haven assets, particularly as fears of prolonged military engagement grow.
In addition, China’s probe into U.S. trade practices has raised concerns about escalating global tensions, increasing uncertainty across financial markets.
These developments have created a balancing effect:
- Safe-haven demand supporting prices
Macro pressures pushing prices lower
As a result, silver has rebounded toward the $70 level after last week’s decline, reflecting a tug-of-war between opposing forces.
Oil Surge and Inflation Concerns Add Complexity
Rising oil prices have added another layer of pressure. With crude climbing above $105–$110, inflation concerns have resurfaced, tightening financial conditions globally.
Higher energy costs increase input prices for businesses and reduce consumer purchasing power, which can weigh on industrial demand for silver. At the same time, inflation fears can support precious metals, creating mixed signals for investors.
Military Developments Keep Markets on Edge
Reports suggesting extended military operations, including potential ground involvement, have reinforced uncertainty. The deployment of assets such as the USS Tripoli indicates that the conflict may persist longer than initially expected.
Even without a full-scale invasion, prolonged tensions are enough to keep markets volatile and maintain a baseline level of safe-haven demand.
Dollar Strength and Fed Policy Weigh
A stronger U.S. dollar has been a key factor behind silver’s decline. Rising oil prices have increased global demand for dollars, as energy transactions are priced in USD, pushing the currency higher.
At the same time, Jerome Powell signaled a more hawkish stance from the Federal Reserve, warning that inflation could remain elevated. Market expectations for a May rate cut have dropped sharply, from around 60% to just 16%.
Higher interest rates reduce the attractiveness of non-yielding assets like silver, accelerating selling pressure.
Industrial Demand Adds Complexity
Unlike gold, silver has a significant industrial component, with demand tied to sectors such as electronics, electric vehicles, and solar energy. This makes it more sensitive to economic growth expectations.
Upcoming economic data, particularly flash PMI surveys, will be closely watched for signs of slowing business activity. Any indication of weakening demand could further pressure silver prices.
Conclusion: Silver’s recent price action highlights a complex interplay between macroeconomic forces and geopolitical risks. While rising yields and a stronger dollar triggered a sharp selloff, escalating global tensions are helping to provide support.
Looking ahead, silver is likely to remain highly volatile. If macro pressures persist, further downside cannot be ruled out. However, sustained geopolitical uncertainty and safe-haven demand could limit losses and support a gradual stabilization in the near term.
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