Silver Holds $74 After $84 Peak as Fed Cuts and RSI Signal Next Move
Silver prices are finally starting 2026 on a bit more even keel. The XAG/USD is currently trading a little above $74.40 - holding...
Quick overview
- Silver prices are stabilizing above $74.40 after a significant drop from last year's high of $83.98.
- The market is supported by expectations of Federal Reserve interest rate cuts and ongoing geopolitical tensions driving demand for precious metals.
- Technical indicators suggest that silver is consolidating within a rising channel, with key support at $72.30 and resistance at $75.10.
- Overall, pullbacks in silver prices are viewed as buying opportunities, with a suggested trade idea to buy near $72.50 targeting $78.00.
Silver prices are finally starting 2026 on a bit more even keel. The XAG/USD is currently trading a little above $74.40 – holding above a key support level after a pretty sharp fall back from the $83.98 high set late last year. Although that correction was fairly swift, the price action over the past few sessions does suggest that sellers are starting to lose enthusiasm rather than just pushing lower and lower.
Take a look at the 4 hour chart and you can see that Silver is still stuck inside a rising channel which has been guiding the uptrend since early December. The channel’s lower boundary is now very close to $72.30 a level that has been attracting buyers on more than one occasion. You can also see from recent candlesticks that the real bodies are getting smaller and there are visible lower wicks around this zone, which is a sign that any attempts to push further down are being absorbed rather than taken advantage of.
Fed Policy and Safe-Haven Flows Make a Big Difference
Silver’s stabilization is taking place against a pretty supportive backdrop. Like gold, it continues to benefit from expectations that the Federal Reserve is going to have to cut US interest rates in 2026 – after the 25-basis-point cut in December, which took the policy range down to 3.50% – 3.75%. Lower rates make it easier for people to hold onto precious metals because they’re not missing out on as much in interest income.
[[XAG/USD-graph]]
At the same time though, the persistent geopolitical tensions and global uncertainty are still driving demand for hard assets. Although silver is more sensitive to growth expectations than gold, its role as a monetary and industrial metal keeps it tuned into both policy easing and supply chain risks.
Of course the upcoming US data, including the final Manufacturing PMI, is going to have an influence on the short term direction of silver – mainly because it will impact the dollar and expectations of further interest rate cuts. But in the bigger picture the overall macro tone is pretty supportive.
Silver (XAG/USD) Technical Levels Define the Near-Term Range
If we take a look at the retracement levels for silver, we can see that it’s consolidating between:
- 38.2% Fibonacci: $75.10
- 50% Fibonacci: $72.36
- 61.8% Fibonacci: $69.62
The 50-period moving average – which is sitting around $71.95 – is currently acting as a pretty solid support level. Meanwhile the 200-period MA below $68.30 is still pointing upwards, which is reinforcing the broader trend.
The momentum indicators are also starting to show signs of stabilizing. The RSI has recovered towards 53 which is a pretty healthy reading and suggests that the balance has shifted away from exhaustion and towards a renewed push upwards, if the resistance level comes under pressure.
Key levels to watch:
- Resistance: $75.10, then $78.50
- Support: $72.30, then $69.60
Silver (XAG/USD) Outlook: Pullbacks Still the Best Time to Buy
While it’s true that the silver price is still a bit volatile, as long as it stays above the lower channel boundary, the overall structure suggests we’re in a continuation rather than reversal mode. And the technical and macro backdrop is pretty supportive, which means pullbacks are still seen as good buying opportunities, rather than an excuse to get out.
Trade idea: Buy near $72.50 with the target being $78.00 and a stop loss below $69.60.
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