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Silver Below $50! Crash Ahead?
Commodity
Forex
Summary:
In Friday's European session, silver printed a fresh weekly low near $49.20. With the market pricing out a December Fed cut, the metal remains under heavy sell pressure.
Sell
CLOSEDXAGUSD
End Time
49.376
Entry Price
45.000
TP
53.000
SL
51.406 +0.067 +0.13%
660
Points
Profit
45.000
TP
48.716
CLOSING
49.376
Entry Price
53.000
SL
Fundamentals
According to data from authoritative international bodies, the global silver market is heading into its fifth consecutive year of supply deficit, with the shortfall expected to reach approximately 95 million ounces in 2025. This is not a sudden crisis, but a chronic structural imbalance that has persisted for years. What distinguishes the current cycle, however, is a decisive shift in the primary driver of the deficit.
Industrial fabrication demand has softened amid the global economic slowdown, yet this gap has been more than offset by an explosive wave of investment demand. Holdings of physically-backed silver ETFs have surged to 187 million ounces, a multi-year high, underscoring that investors now regard silver as a safe-haven hedge against stagflation and sovereign-credit volatility. The price-setting force is no longer factory orders, but a torrent of institutional and retail capital.
Beyond market fundamentals, policy has opened a new valuation channel for silver: Washington recently designated the metal as a "critical mineral." This re-labeling is material—it confers strategic status at the federal level and flags prospective policy support, strategic stockpiling, or trade restrictions. Over the long run it establishes a durable policy floor under the silver price.
According to the CME FedWatch Tool, there is a 35.5% probability that the FOMC will lower the federal-funds target range by 25 bp to 3.50%–3.75% at its December meeting. A status-quo outcome would be an ill omen for non-interest-bearing assets such as silver. Officials' lingering concern about upside inflation risks keeps dovish Fed pricing subdued. On Thursday, Cleveland Fed President Beth Hammack said elevated inflation is the economy's "real problem," adding that "inflation is still too high and moving in the wrong direction," and therefore monetary policy needs to remain "modestly restrictive."
Meanwhile, the continuously rising U.S. unemployment rate has failed to materially strengthen market expectations for a dovish shift by the Fed. Thursday's release of September non-farm payrolls showed the jobless rate climbing to 4.4%. In Friday's session, investors will focus on the flash reading of S&P Global's U.S. Purchasing Managers' Index (PMI) for November, due at 14:45 GMT.
Technical Analysis
On the daily chart, the Bollinger Bands on silver are contracting, with the bandwidth narrowing and the moving averages flattening. After facing resistance at the upper Bollinger Band, the price is oscillating near the middle band. The MACD has formed a bearish crossover (dead cross), and upward momentum is waning—this is a classic top divergence signal, indicating further downside ahead. RSI stands at 49, reflecting a neutral-to-bearish sentiment. Key support levels are at the EMA50 (47.8) and the lower Bollinger Band (45.5).
The Bollinger Bands are widening downward, and the moving averages are fanning out bearishly, confirming the short-term downtrend remains intact. The price is likely to retest the EMA12 descending trendline before resuming its decline, with a high probability of breaking below 45.5. RSI at 36 shows strong bearish momentum.
In this stage, traders are recommended to take short positions at highs.
Trade Recommendations
Trade Direction: Sell
Entry Price: 49.4
Target Price: 45
Stop Loss: 53
Support: 45/40/37.7
Resistance Levels: 50/52/55
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