Silver at a Crossroads: Correction Deepens, but Bulls Prepare a Counterattack
The silver market (XAG) has once again come into focus after a local rebound of nearly 3%, pushing quotes to $66.7. However, despite this momentum, the metal is still trading 45% below its January high and is at a critical level that will determine its future trajectory. The observed dynamics represent a classic example of the struggle between recovery attempts and the risk of a deeper decline.
The local uptick coincided with a reduction in geopolitical tensions in the Middle East, which temporarily weakened demand for safe-haven assets. However, a stronger dollar and cautious rhetoric from the Federal Reserve continue to pressure the precious metals market. As a result, silver remains caught between hopes for a reversal and the threat of a continued downtrend.
Key level $68.88
On the four-hour chart, silver has broken through the 0.618 Fibonacci retracement level of $68.88 and is now attempting to reclaim it. This level has become a bifurcation point for the market. Independent analyst Kamil Uray notes that support remains at $63, and this level is holding for now. If the price surpasses $71, the path to resistance in the $77-89 range will open up.
Until quotes firmly settle above this zone, silver remains in a corridor between support at $63 and resistance at $71. Any move beyond this range will set the direction for the medium-term outlook.
XAG forecast: everything hinges on the $68.88 level
On the daily chart, silver has shown a sustained downtrend since January. At peaks around $96 and $89, new lows formed almost immediately. The RSI indicator has risen to the 40 level but has not yet crossed the neutral 50 mark, indicating continued bearish pressure.
A recovery above $68.88 would shift market attention first to $79, then to the resistance zone at $89. If the level is lost, silver could return to $55 — the 0.786 Fibonacci retracement level, coinciding with long-term support.
My view: For now, the initiative remains with sellers, and silver needs to firmly establish itself above $68.88 to even begin discussing a reversal. A deviation from this level will keep the structure bearish, with the next target being $55. Investors should monitor macroeconomic signals and Fed actions — these will dictate sentiment in the precious metals market in the coming weeks.