Silver Price Forecast: $75 Pullback After 70% Rally Puts Bulls to the Test
Silver prices took a step back early in European trading, pulling back from those recent highs around $82-$84 as traders jumped...
Quick overview
- Silver prices have retreated from recent highs of $82-$84 as traders take profits ahead of the New Year.
- A stronger US dollar and light trading volumes have contributed to the downward pressure on silver, pushing it towards $75.40.
- Despite the pullback, the market remains supportive due to expectations of further rate cuts from the Federal Reserve.
- Key technical levels to watch include immediate support around $75.00 and resistance at $78.70-$79.10.
Silver prices took a step back early in European trading, pulling back from those recent highs around $82-$84 as traders jumped at the chance to lock in some profits before the New Year break was fully underway. Thin holiday markets made the slide more pronounced, and a steady US dollar just piled on the pressure by making silver that bit more expensive for non-US buyers – XAG/USD sank towards $75.40, signalling that, after a long run-up, silver was finally pausing for a breather.
The pullback comes after silver put in a pretty impressive show earlier this month, driven by a sharp fall in yields and a growing sense that the world’s central banks are on the verge of ending the restrictive policies that’ve dominated the market in recent times. With prices already high and volumes pretty light, there’s just less appetite right now for chasing after extra gains in the short term.
Dollar Strength and Fed Outlook: Key Drivers of Near-Term Sentiment
A firmer US dollar is still looking like a near-term headwind for silver – recent US labour data, such as jobless claims that came in at 214,000, only reinforces the view that the US economy is slowing rather than suddenly collapsing. That balance has helped stabilise the dollar, putting a lid on immediate upside for precious metals.
[[XAG/USD-graph]]
Despite that, the market is still supportive. The Federal Reserve has already delivered three rate cuts this year, totaling 75 basis points, and markets are pricing in more easing going into 2026. According to the CME’s FedWatch tool, there’s roughly an 18% chance of a January rate cut, which keeps all expectations in silver’s favour for the longer term, since lower rates make non-yielding assets more attractive
Silver Technical Outlook: New Year – New Challenges
From a purely technical perspective, silver’s failure to break through that key $81.80 – $84.00 resistance zone sparked off a pretty aggressive wave of downwards movement on the charts, which is more a case of profit-takers cashing out than a sign that silver’s suddenly broken down.
Now that we’re testing the rising trendline, which came into play around mid-month, around $74.80 – $75.00, that’s going to be a key area to watch for support. Key technical levels to keep an eye on:
- Immediate support: $75.00 – $74.80
- Secondary support: $73.10 – then $71.80
- Resistance: $78.70 – $79.10, followed by $81.80
- 50-Ema: Rising around $73.10
- 100-Ema: Way below at $69.90
- RSI: Starting to cool off towards 50, which is a sign of a momentum reset rather than a full-on reversal
So long as silver holds above that rising trendline, the broader picture remains bullish.
Trade idea: Pick up a bounce around $75.00 and target $78.80, but with a stop just below $73.80.
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