Silver price ( XAG/USD) extends the decline to around $48.10 during the early Asian session on Wednesday. The white metal remains under pressure after facing its steepest sell-off in years in the previous session as traders locked in profits. 

Silver tumbled more than 8% to mark its largest daily drop since 2021, amid concerns that the recent record high in the white metal left it overvalued. Additionally, easing trade tensions between the United States (US) and China lifts the US Dollar (USD) and undermines the USD-denominated commodity price. 

US President Donald Trump last week threatened a new 100% tariff on China and suggested he would skip a meeting with Chinese President Xi Jinping to be held in South Korea later this month. Trump softened his stance over the weekend, saying that high tariffs on China are unsustainable, and expressed willingness for smoother relations with China. Trump late Tuesday noted that an upcoming meeting with his Chinese counterpart would yield a “good deal” on trade.  

On the other hand, the ongoing US government shutdown, geopolitical risks and the expectation of the Federal Reserve (Fed) rate cuts could boost the safe-haven assets like Silver. The US federal government shutdown has entered its fourth week with no clear end in sight, marking the third-longest funding lapse in modern history. The GOP-backed bill failed to pass the Senate for the 11th time on Monday.

Traders are currently pricing in nearly a 99% possibility that the US central bank will cut interest rates again next week, followed by another reduction in December, according to the CME FedWatch tool. Lower interest rates could reduce the opportunity cost of holding Silver, supporting the non-yielding precious metal. 

Gold is attempting a recovery above the $4,100 mark early Wednesday, after having reversed a further sell-off to near the key $4,000 support. Gold buyers fight back control, awaiting fresh developments on the US-China trade front.

Gold was down but not yet out

Gold is licking its wounds following the intense volatility witnessed so far this week.

Having lost over 5% on Tuesday, Gold gave away another $125 in the early Asian trading hours, but bargain hunters quickly jumped in at lower levels, driving the bright metal back to near $4,100 threshold.

Tuesday’s $230 correction was mainly due to profit-taking as the record-setting rally was overdone. Traders resorted to cashing in on their long positions amid easing US-China trade tensions as US President Donald Trump touted a fair deal with China when he meets his counterpart Xi Jinping in South Korea next week.

Meanwhile, markets also eagerly awaited the trade discussions between US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng in Malaysia to de-escalate the renewed trade tensions.

The sell-off in Gold was also sparked by an intense buying wave in the US Dollar (USD), courtesy of a sharp rally in the USD/JPY pair. The Japanese Yen (JPY) faced strong headwinds after Sanae Takaichi was elected as Japan’s Prime Minister. An expansionary era in Japan is likely to return, with Takaichi at the top, which weighed on the JPY while boosting USD/JPY.

Looking ahead, all eyes remain on fresh developments surrounding the US-China trade talks, with the US government shutdown still in place and a meeting between Trump and Russian President Vladimir Putin called off.

Gold price technical analysis: Daily chart

Gold tested the critical support in the area $4,007-$3,973, where the 21-day Simple Moving Average (SMA) and the 38.2% Fibonacci Retracement level of the parabolic rise from mid-August align.

Buyers need to recapture the 23.6% Fibo support-turned-resistance at $4,129 to sustain the rebound toward all-time highs of $4,382.

Ahead of that level, the $4,300 round figure needs to be taken out.

The 14-day Relative Strength Index (RSI) has paused its pullback from the extreme overbought zone to trade near 59, as of writing.

The leading indicator suggests that the longer-term bullish potential in Gold remains intact.

On the flip side, if the aforesaid confluence support zone at around $4,000 gives way, a steeper correction could unfold toward the 50% Fibo level at $3,847.

The line in the sand for Gold buyers is seen at the 61.8% Fibo, the Golden Ratio, at $3,722. The 50-day SMA coincides at that level, making it a powerful downside cap.

Silver (XAG/USD) is finally correcting lower. Market expectations that the US and China will de-escalate trade tensions are boosting the US Dollar’s recovery and hurting precious metals. Silver has extended its reversal from last week’s highs at the $55.00 area, to session lows near $49.00 so far.

US President Trump soothed markets on Monday, announcing that he was planning to meet his Chinese counterpart Xi Jinping next week, and that he expected to reach a “fair deal” which would lead to a good trade relationship between the two countries. These comments tackled fears of a trade war and have sent the US Dollar rallying across the board.

Technical analysis: A bearish H&S pattern is in play

Silver has broken below the base of the ascending channel from mid-September lows and extended losses below the neckline of a bearish Head & Shoulders, a common figure in trend shifts, at the $50.71 area.

The pair is attempting to return above the $50.00 psychological level at the time of writing, and is likely to retest the mentioned H&S neckline, which might act as a resistance now, at the 50.80 area. Further up, the target would be the reverse trendline, near 52.10.

To the downside, intra-day lows are at $49.20 ahead of the October 9 low, at $48.45. The H&S pattern’s measured target is coincident with the 61.8% Fibonacci retracement of the September-October rally, at $46.15.

XAU/USD Current price: $4,110.22

• A better market mood heavily weighed on the safe-haven metal on Tuesday.
• The US will release Consumer Price Index data next Friday.
• XAU/USD could extend its corrective decline towards the $4,000 threshold.

Spot Gold plunged on Tuesday amid a better market mood and resurgent US Dollar (USD) demand. The XAU/USD pair fell towards $4,080 before bouncing to the current $4,110 level, holding on to substantial losses in the American afternoon.

The market sentiment improved after the United States (US) President Donald Trump made some optimistic comments about a potential trade deal with China, ahead of an economic conference in South Korea next week, when he will likely meet his Chinese counterpart, Xi Jinping. Global equities reflect the latest optimism, with most global indexes trading in the green.

On a negative note, the US government shutdown continues. The US Senate voted again on Monday on potential funding bills, rejecting both the Democratic and the Republican proposals, though market participants seem unconcerned.

The notorious absence of US macroeconomic data will be broken on Friday, when the Bureau of Labor Statistics will release September Consumer Price Index (CPI) data. The reading is critical ahead of the Federal Reserve (Fed) monetary policy meeting next week.

XAU/USD short-term technical outlook

The daily chart for the XAU/USD pair shows that the sharp decline could be seen as a corrective move. Technical indicators head south almost vertically, but remain within positive levels and erased extreme overbought conditions. At the same time, the pair keeps developing far above all bullish moving averages, with the 20 Simple Moving Average (SMA) currently at $4,001.20.

The near-term technical picture suggests XAU/USD may not be done correcting lower. The pair is currently developing far below its 20 SMA, which turned lower. The 100 and 200 SMAs maintain their bullish slopes below the current level, with the shorter one currently at $4,043. Finally, technical indicators approach oversold readings without signs of giving up and retaining their strong downward momentum.

Support levels: 4,105.10 4,081.70 4,065.90

Resistance levels: 4,134.45 4,148.30 4,162.60

Silver gathers Momentum beneath $54 – Following Gold’s footsteps

Silver has entered a tension-filled holding pattern — not weak, just waiting for ignition.

After rallying to $54/oz, its highest in more than a decade, the market is now consolidating just below that level, mirroring gold’s earlier pattern before its own explosive breakout.

The reason? The metal is balancing order flow inside a critical 4-hour Fair Value Gap (FVG) between $51.118–$52.395 — a zone where prior selling created inefficiency.

Price currently sits at $50.75, testing buyers’ commitment as volume compresses and liquidity builds.

This “pause before propulsion” could define silver’s next major phase — and traders are watching whether it repeats gold’s parabolic move.

Silver mirrors Gold’s macro tailwinds

Industrial demand still rising:

Silver’s dual role — industrial metal and monetary hedge — keeps it in demand. The solar and EV sectors continue to consume record levels of silver, straining mine output in Mexico, Peru, and China.

Physical shortage deepens:

Physical silver inventories at London and COMEX remain near multi-year lows, forcing refiners to reroute supply from Asia. This supply squeeze underpins the spot premium and keeps futures backwardated.

Safe-haven flows pick up:

With the U.S. shutdown dragging on and investors bracing for further Fed cuts, funds are once again rotating into metals. As gold flirts with $4,500, silver is attracting renewed speculative inflows aiming to catch “the next gold-style breakout.”

Technical outlook: Silver mirroring Gold?

Silver’s structure remains constructively bullish, though tactically neutral within the current balance.

The 4-hour volume imbalance ($51.118–$52.395) acts as the pivot — a zone where supply met demand but delivery remains unfinished.

Price is compressing between this imbalance and immediate support at $49.665.

When that compression breaks, momentum should accelerate sharply.

Key technical levels

Bullish scenario – Reclaiming the 4H volume imbalance

Silver’s repeated defense of $50–$50.70 shows buy-side absorption.

If price reclaims $51.118, it signals demand stepping back into imbalance territory.

Trigger:

A 4H close above $51.118 followed by a break through $52.395 confirms that sellers’ inefficiency has been filled and flipped to support.

Targets:

• $53.00 – first liquidity magnet
• $54.00–$55.00 – next expansion wave

Narrative:

This would mark a bullish re-balancing of volume, restoring buy-side delivery similar to gold’s prior structure.

A successful FVG reclaim transforms the zone into demand — often the prelude to a sustained breakout.

Bearish scenario – Rejection from the volume imbalance

Failure to close above $52.395 or repeated rejections inside the FVG suggest sellers are still defending overhead liquidity.

Trigger:

A 4H close below $50.60 signals renewed sell-side control and continuation toward liquidity resting below $49.60.

Targets:

• $49.665 – immediate liquidity draw
• $48.50 → $47.80 – deeper discount territory

Narrative:

As long as $51.118 remains unclaimed, the imbalance stays bearish.

Price could slide into discount levels before rebuilding another leg higher.

Volume balance story: The pivot between two worlds

The $51.118–$52.395 zone is the line in the sand.

Volume is evenly balanced — neither bulls nor bears hold control — but this balance is unstable.

• Above $52.395 → Buy-side imbalance resumes → breakout toward $54.
• Below $50.60 → Sell-side imbalance resumes → draw to $49–$48.

This equilibrium reflects a coiled-spring structure: energy building beneath resistance, similar to gold’s pre-breakout profile earlier this quarter.

Final takeaway

Silver is standing at a technical crossroads that echoes gold’s structure weeks ago — tight compression, rising demand, and a visible imbalance zone waiting to break.

Reclaiming $52.395 could unleash a fast leg toward $54–$55, validating the idea that silver is becoming “the next gold.”

Failing to do so simply extends the accumulation window around $50–$49, where long-term buyers likely reload for the next wave.