Silver price prediction: XAG slides below $89 as tariff delay and easing tensions trigger sharp unwind

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Silver pullback resets momentum

Highlights

Silver drops nearly 6% in one session as safe-haven demand cools sharply.
Delay in U.S. tariffs on critical minerals removes key upside catalyst.
Broader bullish trend intact, but volatility rises as market digests gains.

The sudden reversal marks a clear shift in tone, with traders moving quickly to unwind risk after macro tailwinds that fueled the rally showed signs of fading.

Technical structure resets after overheated breakout

On the daily chart, silver’s broader trend remains decisively bullish despite the intensity of the correction. Price continues to trade well above all major EMAs, underscoring the strength of the longer-term structure. The 20-day EMA near $77.3 and the 50-day EMA around $66.9 are rising steeply, while the 100-day and 200-day EMAs far below near $57.9 and $49.1 highlight just how extended the rally had become.

SILVER price dynamics (Source: TradingView)

The rejection from above the $93 level reflects exhaustion rather than a structural breakdown. After weeks of near-vertical gains, silver entered an overheated phase where profit-taking was inevitable once catalysts cooled. The speed of the selloff speaks to how crowded the long side had become, but the absence of follow-through below key trend levels suggests this move is corrective, not trend-ending.

Momentum indicators support that interpretation. Daily RSI had been hovering near overbought territory before rolling over sharply with the selloff and is now easing back toward the high-60s. This reset relieves upside pressure and lowers the risk of a deeper momentum unwind, provided RSI holds above the 60 threshold. A sustained move below that level would signal the correction is broadening, but for now momentum remains consistent with consolidation inside a strong uptrend.

On lower timeframes, volatility remains elevated. The 30-minute chart shows silver finding tentative support in the $86.5-$87.5 zone after breaking below short-term Supertrend and SAR support near $91. Dip buyers have started to reappear, but price remains capped below the former breakout area, keeping intraday structure choppy and favoring range-bound trade rather than immediate continuation higher.

Macro drivers shift as safe-haven premium fades

Fundamentally, the pullback aligns with a rapid cooling in macro tailwinds that had driven aggressive inflows into precious metals. The decision by President Trump to pause immediate tariff action on critical mineral imports reduced urgency across the metals complex, removing a key pillar of support that had fueled silver’s surge.

At the same time, easing geopolitical tensions, particularly around Iran, dampened defensive demand. With immediate escalation risks fading, capital rotated away from safe-haven positioning, accelerating profit-taking in assets that had become heavily one-sided. U.S. economic data also failed to alter expectations around Federal Reserve policy, leaving markets without a fresh catalyst to justify chasing prices higher after such an extended run.

The combination of these factors led to a rapid repricing of risk premiums that had built up aggressively over recent sessions. Importantly, this was not driven by a deterioration in silver’s longer-term fundamentals, but by a change in timing and urgency. That distinction matters for how the correction ultimately resolves.

Key levels to watch as silver consolidates gains

Looking ahead, the technical roadmap is clear. Initial support sits in the $86-$85 zone, where buyers have already begun to test the waters. A deeper corrective move would likely target the rising 20-day EMA near $77, which represents the first major trend support. As long as price holds above that area, the broader bullish structure remains intact.

On the upside, silver needs to reclaim the $91-$93 band to reassert momentum and reopen the path toward new highs. Until that happens, volatility is likely to remain elevated as excess leverage is worked off and positioning normalizes.

In previously discussed analysis, silver was described as entering price-discovery mode after breaking out of a multi-year range, supported by strong safe-haven flows and macro uncertainty. The current pullback does not invalidate that thesis, but it does mark a transition from explosive momentum into a digestion phase. How silver behaves around rising trend support will determine whether the next leg higher resumes or whether consolidation extends further.

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