Silver (XAG) Forecast: Silver Rally Extends After Rebound from Nearly Half of Record High

Silver’s Trend Is What Matters, Not the War

As a silver trader, the first thing you should be asking yourself on Wednesday is what is the trend? Then you need to identify support and resistance. Lastly, define yourself as a trend trader or counter-trend trader. The worst thing to be worried about is silver’s relationship with the war.

I get a kick out of all those comments this week about the collapse in gold and silver when there is a war going on. All you had to do is go back to the first trading day after the start of the war. On Monday, March 2, silver prices surged to $96.43, but then suddenly reversed down to finish 4.74% lower. So anybody who asks why silver dropped sharply this week on Monday, they all need to take a look at the chart and go back to March 2 and March 10 to see that traders were selling rallies. It does no good to start worrying about the “why” when the market is already down close to $30 since the war started. I take some of that back because those war comments may have been the best contrarian indicator.

The War Isn’t the Story, the Chart Is

Personally, I did not see as many comments about silver’s relationship with the war when the market was reversing down on March 3 than I did on Monday when Spot Silver fell to $61.00 before recovering. Whether you want to blame the war or peace talk rumors for this week’s volatility, that’s a personal preference. You can throw in higher for longer interest rates, rate hike chatter, stagflation, or Fed Chair Powell’s retirement and transition to Kevin Warsh. And by the way, whatever happened to the supply deficit and AI center demand.

All of these factors at one time drove the rally in silver in 2025 and I think they supported the long-term bullish argument before the surge in speculative buying drove the market from a $60.67 close on December 9 to the $121.67 top on January 29.

A Do-Over at $61.00

Flash-forward to the March 23 low at $61.00. It was pretty close to the December 9 bottom at $60.67 and 50% of the all-time high at $60.83. In other words, we’ve erased the speculative buying rally and we’ve given back about half of the record high. So let’s call it a “do over”. Or a spot on the chart where you get the chance to go long, knowing where silver can go if there is a rally.

Some traders read this correction to $61.00 as a great chance to buy silver at nearly half of where it was less than two months ago. This decision makes more sense than betting on a war. Those buyers had their reasons, but the biggest one is that they saw value. Now they don’t know what fundamental event could help drive the market higher and they may not care. Because all they can control is their entry. All the other events mentioned earlier are out of their control, but at least they bought their price and now have a manageable trade.

Bidders Have Replaced the Momentum Traders

The last time that silver was trading near $61.00, the rally was driven by speculative momentum. Traders were coming in every day, taking out offers. Now we have traders bidding. Totally different trading style.

Technical Outlook

Looking at the short-term picture using the moving averages, we have the potential for a rangebound trade with the 200-day moving average providing the long-term support at $57.82 and the short-term resistance coming in at the 50-day moving average at $85.47. The mid-point of the two MA’s is about $71.65. This price could determine whether the rally extends to the 50-day MA or retreats back to the 200-day MA.

More Information in our Economic Calendar.