Silver Price Forecast: XAG Pulls Back to $116 as Trend Support Faces Its First Real Test
Silver (XAG/USD) is taking a breather after a strong rally that brought prices close to the $118 to $120 range. In the latest session...
Quick overview
- Silver (XAG/USD) is experiencing a pullback to around $116.70 after a strong rally, indicating consolidation rather than a trend reversal.
- The demand for silver remains strong due to ongoing concerns about the Federal Reserve, a weaker US dollar, and rising geopolitical risks.
- Key support levels for silver are at $115.40 and $112.80, while resistance is seen between $118.00 and $120.00.
- The overall bullish outlook for silver persists as long as it remains above the trend support level.
Silver (XAG/USD) is taking a breather after a strong rally that brought prices close to the $118 to $120 range. In the latest session, silver dipped to about $116.70, showing a measured pullback instead of a trend reversal. Like gold, this move signals consolidation after big gains, not a loss of momentum.
The same factors that pushed gold to record highs are still supporting silver. Ongoing worries about the Federal Reserve, a weaker US dollar, and rising geopolitical risks have kept demand strong for hard assets. Gold has led the way, but silver has followed closely, gaining from both safe-haven buying and its use in industry.
Macro Forces Still Favor Precious Metals
Silver’s outlook is still linked to the same factors affecting gold. The Federal Reserve has kept rates steady, and political pressure on monetary policy has limited any rebound in the dollar. Most investors now expect rates to stay unchanged for a while, with possible cuts delayed until 2026, which keeps US yields from rising much.
At the same time, geopolitical tensions across the Middle East, Eastern Europe, and renewed trade uncertainty in Europe continue to support defensive positioning. Even as risk assets remain resilient, investors are keeping exposure to precious metals as a hedge against policy and geopolitical shocks. For silver, this environment favors dips being bought rather than sold aggressively.
Silver Technical Structure: Trend Support Is the Line in the Sand
Looking at the charts, silver is still in a clear uptrend on the 2-hour timeframe. The price is pulling back toward a rising trendline that started with the breakout from the $102 to $105 area. This trendline is close to horizontal support at $115.40, which is an important level for buyers to watch.
Key levels to watch:
- Immediate support: $115.40 (trendline and horizontal demand)
- Secondary support: $112.80–$111.30 (prior consolidation zone)
- Near-term resistance: $118.00–$120.00
- Upside extension: $123.00–$126.50 if momentum rebuilds
The RSI has dropped toward 60, showing that momentum is slowing but still positive. There are no signs of a major breakdown yet. As long as silver stays above trend support, the overall bullish outlook remains in place.
Silver Outlook: Consolidation Before the Next Leg?
Silver’s recent pullback seems more like a pause in the trend than a sign of a top. If buyers come in above $115.40, the price could steady and try for another move toward $120. If gold starts rising again, silver might even reach $123 to $126.
But if silver falls below $112.80 and stays there, it would weaken the bullish setup and point to a bigger correction. Until that happens, silver is still in a ‘buy-the-dip’ market, not a ‘sell-the-rally’ one.
Trade idea: You might look to buy around $115.50, aim for $120.50, and set a stop just below $112.80.
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