Silver Price Forecast: XAG/USD steadies above 50-day SMA after sharp 16% correction

• Silver extends its rebound, supported by short-covering and technical buying interest.
• Improved risk sentiment tied to the US-China trade truce could weigh on haven demand and limit further gains.
• Technically, the metal faces stiff resistance around $49.00-$49.50, where the 21-day SMA continues to cap gains.

Silver (XAG/USD) extends its recovery for the third consecutive session on Thursday, trading near $48.70, up nearly 2.40% on the day, as buyers return after defending the $45.00-$46.00 demand zone.

The rebound follows a sharp correction that saw the metal fall nearly 16% from its all-time high of $54.86 earlier this month to a one-month low of $45.56, before stabilizing above its 50-day Simple Moving Average (SMA).

The latest leg higher appears to be driven more by technical buying than fresh fundamental catalysts, as improved risk sentiment surrounding the US-China trade truce has, in fact, limited safe-haven demand for precious metals.

However, some support stems from the Federal Reserve's (Fed) interest rate cut on Wednesday, though the upside remains capped after markets interpreted it as a hawkish cut following Fed Chair Jerome Powell's signal that further policy easing is unlikely, saying that "a further reduction in the policy rate at the December meeting is not a foregone conclusion."

From a technical perspective, the daily chart continues to show a broader uptrend despite the recent sharp correction. On the upside, immediate resistance is seen in the $49.00-$49.50 zone, which has capped gains in recent sessions and coincides with the 21-day SMA. A decisive close above this area would strengthen the case for a resumption of the uptrend.

On the downside, initial support lies at Thursday's low of $47.26, followed by $45.56, the October 28 low, which closely aligns with the 50-day SMA, a region where dip-buying interest has recently emerged. A break below this zone would risk extending the corrective pullback toward the next key area around $44.50-$43.00.

The Relative Strength Index (RSI) has recovered to 53 after briefly dipping below the neutral 50 mark, suggesting that bearish momentum has slightly eased while buyers are beginning to regain control. Overall, Silver maintains a constructive near-term outlook, with the broader trend still intact as long as the metal holds above $45.50.

Meanwhile, the Fixed Range Volume Profile drawn from the September 18 low of $41.20 to the all-time high of $54.86 shows the Point of Control (POC) around $48.20-$48.50, indicating a critical area of volume-based support where recent consolidation has been concentrated.