Silver (XAG) Forecast: Can Investors Stay Bullish as Gold Shows Overbought Signs?

Silver Holds Steady, Eyes on $33.39 Breakout

Silver traded sideways to lower on Friday, as buying momentum paused just below last week’s multi-month high at $33.39. A decisive break through this resistance would signal a continuation of the broader uptrend, with the market showing resilience despite recent consolidation.

At 12:36 GMT, XAG/USD is trading $32.98, up $0.03 or -0.10%.

Support Levels and Potential Pullback

Current technical analysis suggests a growing possibility of a short-term pullback, although the long-term trend remains firmly bullish. Key support lies within a retracement zone between $32.53 and $31.81. Additional cushions include a minor bottom at $31.25, the 50% retracement level at $30.80, and the 200-day moving average at $30.50​.

Gold’s Influence on Silver

Silver often tracks gold’s movements, and gold’s price action this week could provide clues for silver traders. Gold slipped from Thursday’s all-time high of $2,954.96 but remained on track for its eighth consecutive weekly gain, up around 1.5%.

Market uncertainty surrounding U.S. President Donald Trump’s tariff strategies and the Federal Reserve’s interest rate policies has introduced volatility to gold, which could spill over into silver. With gold showing signs of being overbought and facing a potential pullback, silver could mirror this caution​.

Broader Market Sentiment and Safe-Haven Demand

Trump’s tariffs on lumber, forest products, imported cars, semiconductors, and pharmaceuticals—alongside existing tariffs on Chinese imports, steel, and aluminum—have stirred market sentiment. Inflationary pressures from these policies could force the Federal Reserve to maintain a hawkish interest rate stance, potentially affecting both gold and silver’s appeal as non-yielding assets.

Additionally, weak physical demand for gold in China and India could hint at similar trends in silver, with investment and hedging demand likely driving current price action​.

Market Forecast: Support Holds the Key

While the silver market’s broader uptrend remains intact, caution is warranted. A sustained push above $33.39 could spark renewed buying interest, aligning silver with gold’s bullish momentum.

However, if silver fails to maintain its key support levels, particularly near $31.81 and $30.80, a sharper correction could unfold. Traders should closely watch U.S. economic data, Federal Reserve signals, and gold’s performance to gauge silver’s next move.

More Information in our Economic Calendar.