Silver experienced a decline for the second day in a row as downward pressure mounts, hinting at a possible break below the critical $30.88 level. Despite the current dip, the overarching trend still points upwards; however, traders are vigilant about key support levels that could signify a shift in momentum. As of 12:26 GMT, XAG/USD is at $31.39, marking a $0.29 or -0.92% decrease. Critical Levels for Silver Daily Silver (XAG/USD) At present, silver is testing support, and breaching $30.88 would alter the main trend to a negative trajectory. This could lead to an acceleration towards the 50-day moving average at $29.57. If selling pressure intensifies, a further downturn can be anticipated. A breach of this support level is likely to heighten bearish sentiment, particularly if accompanied by a surge in selling volume. While gold prices have been fluctuating due to a weakened U.S. dollar and declining Treasury yields, silver has failed to capitalize on the same upward push. The ongoing market uncertainty, coupled with geopolitical tensions, has placed silver under duress, as traders await clearer signals from the Federal Reserve regarding interest rates. Impact of Treasury Yields and Federal Reserve Policy Daily US Government Bonds 10 YR Yield Diminishing U.S. Treasury yields have provided some relief for precious metals, but silver has not mirrored the relatively steady performance of gold. The 10-year Treasury note yield has dropped to 4.02%, a reversal from recent highs that typically benefits non-yielding assets like silver. Nevertheless, the market focus remains on the Federal Reserve’s future policy decisions, especially following Fed Governor Adriana Kugler’s remarks on the robust U.S. labor market. The resilience observed implies that rate cuts may not occur as swiftly as anticipated, limiting silver’s allure in the short run. According to the CME FedWatch tool, investors are now less confident about a substantial rate cut, foreseeing a cautious 25-basis-point reduction at the Fed’s upcoming November meeting. This restrained outlook is dampening bullish sentiment in the silver market, as higher interest rates often bolster the U.S. dollar, diminishing silver’s appeal to investors. Geopolitical Concerns and Weak Physical Demand While geopolitical tensions, notably in the Middle East, continue to bolster the safe-haven demand for gold, silver has not experienced a commensurate surge in investor interest. Silver’s price fluctuation is more susceptible to shifts in physical demand, which have notably waned, especially in China – the largest consumer of industrial silver. With China’s central bank refraining from bolstering reserves for the fifth consecutive month and local prices trading at a discount, the global demand for physical silver remains subdued. Silver Market Prediction In the short term, silver faces escalating downside risks, particularly if it breaches the crucial $30.88 level. A failure to sustain levels above this threshold could trigger a sell-off towards the 50-day moving average at $29.57. Though the overarching trend is upward, sustained weakness in physical demand or further indications of tightening U.S. monetary policy may weigh on silver prices. Traders need to vigilantly track Federal Reserve updates and geopolitical developments, as these factors are likely to dictate the next direction for silver.