Silver Price Forecast: XAG/USD Tests Key Trendline Support Amid Profit-Taking
By Vishal Chaturvedi | June 24, 2025
Silver (XAG/USD) experienced a notable pullback on Tuesday as it tested a critical trendline support zone near $35.50–$35.60, following a surge to 13-year highs in the previous week. After climbing to an intraday peak of $36.20 earlier in the day, the precious metal trimmed losses and was trading around $35.80 at the time of writing, just above the session low of $35.28, marking a decline of roughly 0.65% on the day.
Recent Market Movements and Drivers
Last week’s bullish momentum was driven by heightened safe-haven demand amid global economic uncertainties, alongside tightening supply and robust industrial usage. These factors propelled silver prices to their loftiest levels in over a decade. However, the recent consolidation indicates that the market is undergoing healthy profit-taking and adjusting to lower liquidity conditions after the strong rally.
Technical Analysis: Support Holds the Key
From a technical perspective, silver’s daily chart remains generally constructive but shows early signs of a cooling off. The metal retraced towards a vital rising trendline that has supported the uptrend since mid-April. This trendline coincides with the 21-day Exponential Moving Average (EMA) located between $35.50 and $35.60, which has historically acted as a springboard for buyers to re-enter the market.
A decisive break and daily close below this support zone could prompt a deeper correction, with the next important support level positioned near $34.50. This zone was previously a resistance level and is now viewed as a strong floor if the price declines further.
Momentum Indicators Reflect Mixed Signals
Momentum indicators depict a cautious battle between bulls and bears. The Relative Strength Index (RSI) has dropped to 56.50 from recent overbought readings yet remains comfortably above the neutral 50 mark, implying the overall upward trend retains strength. Conversely, the Moving Average Convergence Divergence (MACD) histogram has edged into slightly negative territory, signaling a possible near-term loss of positive momentum.
Price action is characterized by repeated long lower wicks on recent candlesticks, suggesting that buying interest remains significant as investors step in to defend dips.
Outlook and Potential Scenarios
If silver holds its ground and rebounds from the current support zone, it could attempt to resume its upward trajectory toward $36.50 and potentially challenge the psychological barrier at $37.00 should buying pressure intensify.
Conversely, a clear breakdown below the $35.50 support cluster may increase the likelihood of further downside, with $34.50 as the next target support level.
Investor Caution Advised
Market participants are advised to monitor these key technical levels closely, as silver’s price action in the coming days will provide clearer guidance on whether the recent correction is merely a pause within an ongoing uptrend or the start of a deeper retracement.
Disclaimer: This article is for informational purposes only and does not constitute investment advice or recommendations. Trading in commodities such as silver involves risk, including the potential loss of principal. Readers should conduct their own research and consult with financial professionals before making investment decisions. The author and publisher are not responsible for any damages or losses arising from the use of this information.
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