Silver (XAG) Forecast: Can Bulls Extend the Silver Rally or Is a Pullback Ahead?

Silver Softens After Record High as Traders Reassess Near-Term Value

Spot Silver (XAGUSD) eased on Wednesday after briefly touching a new all-time high at $58.95, pulling back to $58.15 as traders paused following last week’s explosive rally. The metal is still up an extraordinary 101% this year, supported by tightening supply conditions, persistent momentum buying, and its recent inclusion on the U.S. critical minerals list. But with price behavior cooling after Friday’s surge, the market is showing the first hints that short-term valuations may be running ahead of fundamentals.

At 13:08 GMT, XAGUSD is trading $58.72, up $0.26 or +0.45%.

Is Silver Finally Getting Overpriced?

Market action this week has been subdued, suggesting some hesitation after the parabolic move above $54.50. Analysts note that overbought conditions now pose a near-term risk for bulls, especially with the nearest support at the 50% level of $53.79. While no formal resistance is in place after the breakout, the absence of fresh buying at the highs signals that any wave of profit-taking could be sharp. Such a pullback, however, would likely attract long-term investors who have been waiting for an opportunity to re-enter after missing Friday’s breakout.

Gold’s Behavior Is Crucial for Silver Traders

The precious-metals complex remains heavily influenced by gold, which continues to hold above a key retracement zone between $4,133.95 and $4,192.36. Traders are watching whether gold can break this week’s high at $4,264.70 and move toward its record at $4,381.44. With the 50-day moving average still rising near $4,058.26, buyers maintain control as long as that level holds. Gold’s ability to attract capital on dips has supported sentiment across metals, and silver’s extended rally has benefited from that backdrop.

Fed Policy Expectations Remain a Major Driver

Markets now price an 87% chance of a December Federal Reserve rate cut, up dramatically from 30% two weeks ago. That pivot, reinforced by weak labor data and dovish comments from Fed Governor Christopher Waller, has pushed Treasury yields lower and continued to boost interest in metals. The dollar is also on track for a ninth straight daily decline — weakened further by uncertainty over future Fed leadership — removing another layer of pressure from silver and gold.

Short-Term Outlook: Bullish but Fragile

Silver retains a bullish fundamental profile, supported by supply constraints and strong investor participation. But after this week’s hesitation at the highs, the market is vulnerable to a cooling phase. A pullback toward the $53.79 support would not negate the broader trend and may even reinforce it by bringing fresh buyers into the market. Near term, silver remains constructive — but traders should expect a more measured tone after last Friday’s surge.

More Information in our Economic Calendar.