Silver (XAG) Forecast: Silver Analysis Shows Bullish Outlook Despite Volatility

Silver Surges Over 3% as Bulls Target Record Highs

Spot Silver (XAGUSD) is trading higher late in the session on Friday. The market pierced $80 earlier in the session but is now trading below it. Bullish traders are still facing resistance at the swing top at $82.77 and the main top at $84.03.

At 19:08 GMT, XAGUSD is at $79.73, up $2.74 or +3.56%.

Critical Support Zone Controls Near-Term Direction

The market is currently straddling the key short-term support zone at $77.05 to $78.70. We’ve been watching this area all week and believe it is controlling the near-term direction of the market.

A sustained move over the upper level at $78.70 will indicate the presence of buyers. If they can build on this move with strong volume, they should have an easy time taking out the two tops standing in the way of another record high.

Key Downside Levels to Watch

If the lower or 50% level at $77.05 fails, then prices could retreat all the way back to the uptrend line that has been leading the market higher since the main bottom at $48.64 on November 21. The trendline comes in at $74.83 today. It was successfully tested earlier in the week at $73.84.

This technical indicator is important to the intermediate trend. If it is taken out with conviction then prices could retreat all the way back to a pivot at $72.41 and eventually the main bottom at $70.07.

Weak Jobs Data Ignites 6% Intraday Rally

XAGUSD jumped on Friday as investors reacted to weaker-than-expected U.S. jobs growth, tightening global supply, and rising geopolitical uncertainty. Today’s more than 6% gain at the top represented another large single-day gain that has been the norm lately and followed a volatile trading week that saw silver swing from a near-record high to nearly a one-week low.

Fed Rate Cut Expectations Fuel Safe-Haven Demand

The market was trading nearly flat earlier today ahead of a U.S. jobs report and a widely expected ruling from the U.S. Supreme Court. A rebound began after fresh U.S. labor market data showed the economy added only 50,000 nonfarm jobs in December, far below recent monthly averages. The softer hiring numbers strengthened market expectations that the Federal Reserve may accelerate interest-rate cuts in 2026, a move that is likely to weaken the dollar and consequently strengthen demand for dollar-denominated silver.

CME Margin Hikes and Index Rebalancing Drive Volatility

Silver has been on a roller coaster ride since the CME raised the margin twice on the metal during the last week of 2025. This is one of the reasons for the short-term volatility. The other is the annual rebalancing of passive commodity funds, which are expected to liquidate about 12,000 futures contracts between January 9 and January 15.

Market Outlook: Long-Term Bulls Remain in Control

This current volatile price action is all part of the bullish long-term picture that is being primarily supported by strong demand and low supply.

Despite the bullish long-term trend, the daily chart is currently supported by a single uptrend line at $74.83. If this support fails, prices could fall into a value area, creating a potential buying opportunity for traders looking to enter in alignment with the long-term uptrend.

More Information in our Economic Calendar.