Silver (XAG/USD) fell 1.5% to $58.97 an ounce by 06:33 UTC today (Thursday), its lowest level since early August. The drop follows minutes of the Federal Reserve's (Fed) September meeting, which showed that most officials expect another rate hike before the end of the year.
Silver had already closed Wednesday below $60, at $59.89. The Fed raised its target range by 25 basis points to 3.75% to 4.00% in September, and the minutes said policymakers may need to lift it a second time before year end.
Higher rates and a firmer dollar raise the cost of holding a metal that pays no interest.
My weekly chart shows why this drop matters more than its size. Last week's candle closed below the March lows and below the 50-week moving average, which in my view opens the way to the $45 area, more than 20% below the current price.
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How Low Can Silver Go?
On the weekly chart, silver closed last week near $60.40, under horizontal support at $61.15 set by the March lows. The same candle finished below the 50-week exponential moving average (EMA), which now sits at $63.62.
This is the second step of the scenario I laid out in my September 2 silver analysis, when silver traded at $63.63 and had just broken its 200-day EMA.
I wrote then that a daily close below $61.15 would activate $55.42 and then $45.40. Daily candles have closed below that level since the end of September, and the weekly chart has now confirmed the break.
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My base case is a move toward $45, where two levels meet: the October 2025 lows at $45.40 and the 200-week EMA at $44.85. From today's price, that is a drop of about 23%.
The first test comes sooner. The summer lows at $55.42 sit about 6% below the current price, and that is where I will watch whether buyers step back in.
What Is Capping Silver on the Daily Chart?
The daily chart shows how little room buyers have. A trend line drawn from the May high near $89.50 turned back both the late-August and the late-September rebounds.
Just under that line, the 50-day EMA at $63.54 and the 200-day EMA at $64.94 have flattened out next to each other. Together they form a resistance band about 8% to 10% above the current price. Silver has now lost the 200-day EMA twice, first in June and again in early September.
| Scenario | Confirmation | Target | Invalidation |
|---|---|---|---|
| Bearish base case | Weekly closes stay below $61.15 | $55.42, then $45.40 and the 200-week EMA at $44.85 | Weekly close back above $61.15 |
| Recovery | Daily close above the trend line and the EMA band at $63.54 to $64.94 | $70.05 | Rejection at the EMA band |
Why Is the Fed Weighing on Silver?
The minutes added to pressure that analysts have been flagging for weeks. Mikołaj Sobierajski, a market analyst at XTB, listed the same headwinds in a Polish-language note on September 23.
"A stronger dollar, high yields and the possibility of another Fed hike are creating three sources of pressure at the same time," Sobierajski wrote. "Only a clear reversal of one of these factors could give the metal room to rebound."
Wednesday's minutes reinforced the third of those factors. Rising Treasury yields and a stronger dollar also hit crypto markets on Wednesday, hours before the release.
What Could Stop the Slide?
The strongest counterargument is positioning. Speculators held a net long of 22,083 contracts in the Commodity Futures Trading Commission (CFTC) data cited by Michał Stajniak, deputy head of research at XTB, on October 5.
That put positioning in the 38.5th percentile, which Stajniak said signals a slightly oversold market and lowers the risk of a cascading sell-off. He added that a lasting change in trend would require a volume-confirmed break above $63.00 and a return above the moving averages.
The supply side still favors longer-term bulls. The Silver Institute expects 2026 to be the sixth straight year of market deficit, at about 67 million ounces.
Gerald Celente, founder of the Trends Research Institute, told Kitco News on October 3 that he never expected gold and silver to fall as far as they have. He said he still sees silver as a long-term holding because of its use in electronics and solar energy.
For my bearish scenario, the level that matters is $61.15. A weekly close back above it would put the breakdown in doubt, and only a daily close above the trend line and the EMA band near $65 would cancel it.
