Silver (XAG) Forecast: Will the Rally Lose Momentum If Risk Appetite Returns?

Is Silver’s Rally Losing Steam? Profit-Taking Pressures Prices Lower

Silver closed lower on Friday, forming a potentially bearish closing price reversal top. While this pattern doesn’t signal an immediate trend reversal, it could trigger a short-term pullback, allowing the market to consolidate recent gains. A confirmation of this pattern may push silver prices toward the support zone between $32.53 and $31.81.

Buyers are likely to step in at these levels, as the 50-day moving average at $31.59 and the 200-day moving average at $30.61 provide solid technical support for both intermediate and long-term trends. However, if silver regains momentum and breaks above $34.08, the uptrend could resume, potentially driving prices toward the next resistance range of $34.87 to $35.40.

On Friday, XAG/USD settled at $33.80, down $0.06 or -0.18%.

Gold’s Historic $3,000 Breakout and Its Impact on Silver

Gold surged past the $3,000 mark for the first time on Friday, fueled by investor demand for safe-haven assets. The rally was driven by concerns over U.S. President Donald Trump’s tariff war, which triggered volatility in stock markets. Investors seeking protection from economic uncertainty poured into gold, pushing it nearly 14% higher year-to-date.

Central bank demand has also played a crucial role in gold’s strength, with China increasing its bullion reserves for the fourth consecutive month. Additionally, expectations of Federal Reserve rate cuts later this year have supported zero-yield assets like gold. Goldman Sachs now sees potential upside beyond its $3,100-$3,300 forecast range, citing ongoing policy uncertainty and central bank diversification away from the U.S. dollar.

Profit-Taking and Stock Market Recovery Weigh on Silver

Despite silver’s strong weekly performance, Friday’s decline was likely driven by profit-taking ahead of the weekend. Some traders reduced long positions following gold’s pullback and the sharp rebound in U.S. equities, which lessened immediate demand for safe-haven protection.

While silver often tracks gold’s movement, its industrial demand component adds another layer of volatility. With stock markets rebounding, risk appetite may temporarily shift away from precious metals, putting near-term pressure on silver.

Market Forecast: Temporary Dip Before the Next Move?

If silver confirms its reversal pattern, prices could see a short-term correction toward $31.81-$32.53, where buyers are expected to step in. Strong support from moving averages suggests any pullback could be limited, keeping the broader uptrend intact. However, if silver regains strength and breaks above $34.08, the next leg higher could target the $35.40 level.

Traders should watch gold’s ability to hold above $3,000 and monitor equity market performance for signs of shifting investor sentiment. A stronger stock market may keep silver under pressure, but continued uncertainty in monetary policy and geopolitical risks could sustain long-term interest in the metal.

More Information in our Economic Calendar.