Silver at a Crossroads: Can the Bounce Overcome the Critical $68.88 Zone?
On Monday, the price of silver (XAG) showed an almost 3% bounce, rising to the $66.7 mark. However, this local uptick is merely a ripple against the backdrop of a deep bearish trend. The metal is still trading 45% below its January all-time high of $121.76, indicating a prolonged and large-scale correction.
The current bounce coincided with a temporary easing of geopolitical tensions in the Middle East, where the escalation between the US and Iran has paused. However, fundamental factors such as a strengthening US dollar and hawkish rhetoric from the Federal Reserve continue to exert powerful pressure on the precious metals market. Silver finds itself caught between hopes for recovery and the risk of further collapse.
Key Level $68.88: A Test of Strength
On the four-hour chart, it is clearly visible that silver broke down through the 0.618 Fibonacci retracement level at $68.88 and is now attempting to climb back above it. This zone will act as a trigger for further movement. I am closely watching whether buyers can establish a foothold above $68.88 — this would be the first signal of a reversal.
Independent analyst Kamil Uray rightly notes that support remains at the $63 level. As long as this threshold holds, the bears do not have full control. If the price breaks through $71, the path to resistance in the $77-89 range will open. Until then, silver remains in a narrow corridor between $63 and $71, where the initiative stays with the sellers.
XAG Forecast: Bearish Scenario Prevails
On the daily chart, a steady downtrend has been forming since January. Each peak (around $96 and $89) is accompanied by a new low, which is a classic sign of a bear market. The RSI indicator has risen to the 40 mark but has failed to overcome the neutral level of 50, indicating weak bullish momentum.
If the price closes the week above $68.88, the market will have a chance for a reversal. My target in this scenario is $79, followed by the resistance zone at $89. However, if the level is lost, the next stop will be $55 — the 0.786 Fibonacci retracement level, coinciding with long-term support. As long as the initiative remains with the sellers, silver needs to consolidate above the designated zone to change the current structure.
My opinion: silver is at a critical point. The strength of the dollar and the hawkish stance of the Fed cannot be ignored — these factors will pressure the metal in the coming weeks. A bounce above $68.88 is a necessary but insufficient signal for a reversal. I am waiting for confirmation from a weekly close before considering long-term purchases.