Silver price forecast: XAG/USD records third straight weekly gain supported by falling dollar

Traders Union
All News
Financial News
Silver gains more despite overbought RSI

Highlights

Silver price jumps above $64 after Fed rate cut weakens dollar and boosts demand
Repeated rebounds from 20, 50, and 100 EMAs confirm strong bullish silver structure
Silver daily RSI above 80 warns of pullback risk despite third consecutive weekly gain

The rate cut by the Fed, the third this year, weakened the dollar by lowering borrowing costs and increasing dollar supply. As a result, the dollar index dropped to its lowest level in eight weeks. This decline has bolstered silver’s attractiveness as a store of value. The trend accelerated even after the Fed signalled a pause in further cuts, as investors chose to look past the caution and focus on the liquidity backdrop.

Silver price dynamics (Dec 2025). Source: Tradingview

Technical patterns reinforced this bullish structure. Earlier in the week, silver bounced off the 100 EMA at $57.70. That was followed by a midweek rebound at the 50 EMA near $60.10, and then another bounce on Thursday off the 20 EMA at $61.50. Each of these retracements was followed by renewed buying, which lifted price successively higher. On Friday, silver once again found support on the 20 EMA at $62.80 during the Asian session before pushing above Thursday’s high to reach $64.35 in the European session.

Daily RSI above 80 flags overbought conditions after aggressive weekly advance

The strength of this upward move is confirmed by the weekly performance. Silver is now up approximately 10% for the week and is set to close out its third consecutive weekly gain. The dollar index also heads for its third straight weekly decline, reinforcing the bullish metal narrative.

Despite these gains, short-term indicators suggest a pause may be near. The daily RSI has pushed above 80, indicating an overbought condition. If profit-taking sets in, immediate support lies at the newly adjusted 20 EMA near $63.40. A drop below that would expose the $62.80 level, which has acted as a pivot point between support and resistance during recent sessions.

This week’s price structure, built on consistent rebounds off rising EMAs and coupled with macroeconomic tailwinds, illustrates strong investor demand for silver even as markets price in a 78% chance that the Fed will hold rates steady next month. The rally has been technically sound, but the overbought condition could soon trigger a pullback before another potential leg higher.

In recent analysis, we discussed how silver climbed to $62.9 after the Fed rate cut boosted sentiment. Lower real yields and a weaker dollar strengthened bullish positioning across the precious metals market.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.