Silver Technical Analysis: Correction Phase Underway as XAG/USD Retreats from Record Highs

Market Overview: Sharp Pullback from $86.00

Silver has experienced a significant pullback from its record peak near $86.00, retreating over $10 to trade around the $74.00 level. The precious metal’s decline reflects shifting market sentiment, primarily driven by peace negotiations between the United States and Ukraine. During a joint press conference over the weekend, President Trump and President Zelenskyy discussed the possibility of resolving the Ukraine conflict, with Trump suggesting progress is imminent. This optimistic outlook has pressured safe-haven assets, including XAG/USD.

Geopolitical dynamics remain fluid. China recently announced substantial military exercises surrounding Taiwan, with multiple Chinese vessels detected in Taiwan’s territorial waters. Such escalations could support precious metals by reinforcing haven demand, potentially limiting further downside for Silver.

Technical Analysis: Chart Signals Suggest Consolidation

The 4-hour timeframe reveals XAG/USD trading at $74.92, hovering near the 21-period Simple Moving Average positioned around $74.00, which continues to act as a floor for prices. This support level underscores the broader uptrend structure.

Momentum indicators paint a nuanced picture. The Relative Strength Index has retreated to 54.79, moving away from overbought conditions and settling into neutral territory. The Moving Average Convergence Divergence indicator has turned southward toward the zero line, signaling weakening bullish momentum after its earlier extremes.

Support and Resistance Levels

Should Silver extend lower, the 21-period SMA at $74.00 represents the initial support. If this breaks, traders should watch the $72.60 level—a previous ceiling from December 24—followed by a broader support zone spanning $69.60 to $70.20, where the 50-period SMA intersects with key December lows and highs.

On the upside, the $80.00 round number acts as a psychological barrier for recovery attempts. The previous all-time high near $85.87 remains the ultimate target for bullish continuation, representing the ceiling established earlier in the trading session.

Conclusion

Silver’s technical setup suggests a consolidation phase within an established bullish framework. While political developments offer conflicting narratives—peace optimism versus Taiwan tensions—the chart structure indicates traders should monitor key support levels for directional confirmation.