Silver (XAGUSD) Price Forecast: $71 Holds as Bulls Eye $76 After Sharp Pullback
Silver prices (XAG/USD) opened up in the European session trading around the $71.86 level, holding steady after a pretty sharp pullback...
Quick overview
- Silver prices opened at $71.86 after a pullback from a recent high of $82.00, remaining a top performer among precious metals this year.
- The Federal Reserve's easing monetary policy and low interest rate expectations are supporting silver's performance despite short-term fluctuations.
- Geopolitical tensions and ongoing global uncertainties continue to drive safe-haven demand for silver, while recent margin requirement increases may prompt short-term profit-taking.
- Technically, silver is holding within a rising channel, with key levels to watch at $71.00 for support and potential upward momentum towards $75.00-$76.00.
Silver prices (XAG/USD) opened up in the European session trading around the $71.86 level, holding steady after a pretty sharp pullback from that recent high of $82.00. Despite the correction, silver is still one of the top performers among the precious metals this year & is benefiting from a combination of the US monetary policy easing up and the ongoing global uncertainty.
Like gold, silver is also getting a boost from the expectations that the Federal Reserve might keep cutting interest rates right on into 2026. When the yields are low, the non-yielding assets generally do better, and silver has been following that script pretty closely – even if you do see some short-term ups and downs.
The geopolitical risks are still very much part of the background, with the ongoing tensions in the Middle East and the strained relationship between the US and Venezuela keeping that safe-haven demand in place – even though silver’s industrial exposure adds a bit of a layer on top of global growth expectations.
Fed Outlook and Macro Risks Shape Demand
The Federal Reserve’s 25-point rate cut, bringing the rates down to 3.50%-3.75%, just reinforced the view that policymakers are much more comfortable with inflationary trends than they were. However, there’s still division within the FOMC, suggesting the path ahead won’t be smooth.
According to CME FedWatch, the chances of a rate cut in January have now slipped to around 15%, trimming near-term optimism. Even so, the overall easing trend remains very supportive of metals.
At the same time, the CME Group raised margin requirements for gold and silver futures, which can prompt traders to take profits in the short term. In that sense, that’s actually what helped explain the recent pullback from the $82 level, rather than signaling a reversal of the trend.
Silver Technical Outlook: Key Levels to Watch
From a technical standpoint, silver is still in good shape. On the 4-hour chart, the price is actually holding up within a rising channel with the lower trend line providing a bit of a buffer around the $71.00 – $71.50 level. The recent candles do show long lower wicks, which is a sign that buyers are stepping in when the price dips.
The Fibonacci retracement levels do highlight this current balance:
- 50% retracement: $72.36 is still acting a bit like a near-term pivot point
- 61.8% retracement: $69.62 is a bit of a downside safety net
- 200-day EMA: around $67.72, which just reinforces the fact that the bigger trend is still quite bullish
The momentum has cooled off but hasn’t broken yet, and the RSI has stabilized in the low 50s, a sign of consolidation rather than trend exhaustion. The price structure looks a bit like a short-term triangle is forming within the bigger bullish move.
Short Term Levels and Trade Setup
If silver can stay above $71.00, we could see momentum pick up again and reach the $75.00-$76.00 level. If we see a sustained break below $69.60, it would weaken the bullish case and push us to deeper support.
Trade idea: Buy near $71.00, target $75.00-$76.00, stop below $69.60.
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