Silver price forecast: XAG rebounds toward $74 after historic selloff

Traders Union
All News
Financial News
Silver price forecast

Highlights

Silver rebounds near $74 after an 8% single-day collapse, its steepest drop in over five years.
Price holds above rising long-term averages, reinforcing the broader bullish trend.
Geopolitical risk and easing rate expectations continue to underpin demand.

The sharp reversal has reshaped short-term sentiment without dismantling the broader narrative. What unfolded was not a slow deterioration, but a sudden clearing of excess leverage built during a powerful advance. As volatility subsides, the focus has shifted from the speed of the drop to whether the longer-term bull structure remains intact. The bounce has not erased the technical damage, but it has confirmed that buyers remain active and willing to step in quickly when prices reset toward trend support.

Trend support holds despite violent reset

On the daily chart, the broader structure remains firmly bullish despite the shock. Silver continues to trade well above its 20, 50, 100, and 200-day EMAs, which are stacked in clean ascending order from the mid-$40s through the high-$60s. This alignment reflects a sustained uptrend rather than a speculative blow-off.

Silver price dynamics (Source: TradingView)

The selloff dragged price sharply back toward the 20-day EMA near $66, where demand emerged almost immediately. That level has acted as dynamic support throughout the second half of the year, and its defense suggests the move was a reset rather than the start of a reversal. Markets often correct violently after parabolic advances, but the ability to hold key trend support is what distinguishes consolidation from trend failure.

Momentum indicators support that interpretation, though with some caution. Daily RSI surged above 75 during the rally, signaling overbought conditions before the selloff hit. The pullback forced RSI back toward the high-60s, cooling excess without breaking the bullish range. Historically, silver has maintained constructive trends as long as RSI holds above 50 during pullbacks, a condition that remains intact.

Shorter time frames show the cost of the liquidation. On the 30-minute chart, silver surged toward the $82 to $83 area before being violently rejected, then flushed into the low-$71s as stops were triggered. Since then, price has climbed back toward $74 to $75, stabilizing above short-term Supertrend support near $72.8. Parabolic SAR has flipped back below price, indicating short-term momentum has turned higher again, though the structure remains choppy. This type of price action is typical after forced liquidation clears weak hands.

Macro and fundamentals continue to support the bull case

Beyond technicals, macro drivers continue to underpin silver’s longer-term strength. Geopolitical risk remains elevated, with renewed uncertainty surrounding the Russia–Ukraine conflict following reports of a suspected drone incident near President Vladimir Putin’s residence. U.S. officials have also signaled the possibility of further strikes on Iran related to nuclear and missile developments, while announcing operations in Venezuela. Such developments reinforce silver’s role as a hedge during periods of geopolitical stress, even if price reactions are uneven.

Fundamentals remain equally supportive. Silver is on track for an annual gain of roughly 158%, one of its strongest performances since 1979. The rally has not been driven by speculation alone. Industrial demand remains strong, particularly from the energy transition and electronics sectors. Supply constraints persist, exchange-traded fund inflows continue to trend positive, and central banks remain active buyers.

Monetary policy has added another tailwind. The U.S. Federal Reserve has delivered three rate cuts, and markets are increasingly pricing further easing in 2026. Lower real yields have historically provided a strong backdrop for precious metals, supporting investor appetite even during periods of sharp volatility.

Market outlook

Looking ahead, the technical roadmap is clearly defined. On the bullish side, silver needs to hold above the $70 to $72 zone on a daily closing basis. As long as that support remains intact, pullbacks are likely to be viewed as opportunities rather than threats. A sustained move back above $76 would signal that buyers have regained control, opening the door to a retest of recent highs near $80 to $82. A clean break through that area would bring $85 and then $90 into focus.

The bearish risk is tied to a failure of trend support rather than headlines. A daily close below $70 would be a meaningful technical warning, exposing the 50-day EMA near $58. A deeper correction toward the $52 to $55 zone, where the 100-day EMA sits, would still fit within a broader bull market but would represent a more painful reset. That outcome would likely require a sharp reversal in rate expectations or a sudden unwind in ETF flows, neither of which is currently evident.

Previously, we highlighted silver’s vulnerability to sharp pullbacks after its near-vertical advance, even as the broader trend remained constructive. The latest move has validated that view. The flush cleared excess leverage and reaffirmed where real demand sits. Until proven otherwise, silver remains in a primary uptrend, trading volatility rather than weakness.

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.