Silver (XAG) Forecast: Testing 50% of All-Time High, Will Long-Term Bulls Step In?

Silver Hit Its Lowest Price Since December

Spot Silver dropped through the March low at $61.00 early Wednesday and printed $60.74 before bouncing. That is the weakest level since December 10, 2025. At early session, XAG/USD is trading $61.18, down $0.38 or 0.62%.

The metal is sitting just above the 50% retracement of the all-time high and the market is watching whether that level holds or gives way. Everything working against silver last week got worse this week. The dollar is stronger, yields are firm, and the Federal Reserve is not giving the bulls anything to work with.

Daily Spot Silver (XAGUSD) Technical Analysis

Spot silver is under pressure early Wednesday but trading is on the light side as the bulls and bears mull the importance of the $61.00 to $60.83 area. The bulls are hoping for a big buyer to step in and defend the area. The bears may be getting on a plunge through this zone.

Let’s look at what these numbers mean. $61.00 is just the March 23 bottom that fueled a rally to $89.38 by May 13. $60.83 is 50% of the all-time high at $121.67 so it’s a more significant level. This is mainly because a pivot this significant can be both major support and major resistance if broken significantly. I’m paying more attention to the reaction to $60.83 than to $61.00.

Overnight, Spot Silver hit $60.74 before turning around. With the technical bounce, bullish traders should now start watching for a potentially bullish closing price reversal chart pattern.

Bottom-picking through passive bidding is not encouraged, but taking out offers after a technical bounce is. One method has you buying weakness, the other has you buying strength. Make sure you know your exits ahead of time and make sure you know if you’re a short-term trader or a long-term investor.

If there is a strong technical bounce then it will likely be fueled by short-covering. Furthermore, don’t expect to see the start of a long-term rally unless buyers can overtake both the 200-day moving average at $69.27 and the 50-day moving average at $73.96.

The last time I saw this moving average set-up was in the stock market in late March, right before the major rally began. On April 8, the S&P overcame both the 200-day and 50-day moving averages. The move launched a huge rally. Anything is possible in silver but the presence of a major catalyst would be nice.

Dollar at One-Year Highs and Still Climbing

The DXY pushed to 101.4 to 101.6, its highest level since May 2026 and near one-year highs. Silver traders already know what the dollar above 101 does to overseas demand. The gains accelerated after the June 17 Fed meeting and have not stopped.

The dollar has been the dominant force against silver for two straight weeks. Every session the DXY moves higher is another session where buyers in India, China, and Europe pay more in local currency for the same ounce. They are not buying at these levels. They are waiting and the bid underneath silver keeps dropping while they do.

The Fed Made This Worse Last Week and Goolsbee Confirmed It

The committee held rates at 3.50% to 3.75% under Fed Chair Kevin Warsh on June 17 and the projections caught the market wrong. Nine of eighteen policymakers projected at least one hike before year-end. Warsh shortened the policy statement, pulled forward guidance language, and did not submit his own dot.

Silver has sold off every session since that meeting. The market had been positioned for eventual cuts and Warsh took that expectation apart in one afternoon. The 10-year yield is sitting near 4.48% to 4.50% and the rate path that was supposed to bring relief for non-yielding assets is now pointing in the opposite direction.

The labor market is stable enough to let the committee wait and inflation is not falling fast enough to force its hand. That combination means the Fed can afford to sit at 3.50% to 3.75% and let the market do the tightening through a stronger dollar and higher yields. Silver is absorbing the full cost of that approach.

Thursday’s PCE Is the Only Thing That Can Change This

Thursday’s PCE report is the one number that can interrupt this trade. A soft print gives the buy side its first reason to test whether the selloff has overshot. A hot print buries that argument and the repricing picks up where it left off. GDP revisions and jobless claims are also on the calendar but the committee sets policy off the PCE and silver is going to trade off it the same way.

A hot PCE validates everything the committee signaled on June 17. The hike probability goes higher, the dollar gets another leg up, and silver pushes further into levels it has not traded at since last winter. GDP revisions and jobless claims are also on the calendar but the PCE is the number the committee sets policy off of. Everything else is noise until Thursday morning.

What to Watch

Thursday’s PCE is the catalyst that determines whether silver stabilizes at $60.83 or breaks through it. The December hike probability jumped from 61% to 88% in a week and a hot inflation print pushes it higher. The dollar at one-year highs and yields near 4.50% are not going to reverse on their own. The data has to do it. Until then the selling pressure stays intact and every rally is getting sold before it starts.

Silver bounced off $60.74 and is sitting just above the 50% retracement of the all-time high at $60.83. That level is the line between a base and a breakdown. If buyers defend it and a closing price reversal forms, the short-covering trade is on but the 200-day and 50-day are both far overhead and a long-term reversal needs a catalyst. If $60.83 fails, the next support is significantly lower and the bears control the next leg.

More Information in our Economic Calendar.