XAG/USD Retreats Amid Technical Correction While Silver Futures Continue 2025 Rally Trajectory

Silver futures price trends remain bullish despite recent technical pullback—the precious metal is on pace for its strongest annual performance, with gains exceeding 150% in 2025. The yellow-grey metal encountered selling pressure during Wednesday’s Asian session, retreating toward the $72.50 level after the CME tightened margin requirements on Silver futures contracts. Market participants attribute the pullback primarily to leveraged position reduction rather than weakening underlying fundamentals.

Exceptional 2025 Performance Driven by Multiple Tailwinds

Silver’s remarkable year-to-date rally has been propelled by converging supportive factors. The announcement of Donald Trump’s expansive tariff agenda triggered initial momentum, which subsequently intensified through ongoing geopolitical flashpoints. Robust industrial demand from the solar energy, semiconductor manufacturing, and data center sectors continues to underpin prices. Additionally, speculative appetite in China has surged dramatically—Shanghai Futures Exchange premiums have climbed to historic highs, reflecting intense domestic buying pressure and effectively tightening global supply availability. This premium compression mirrors earlier inventory constraints experienced across London and New York storage facilities, signaling structural supply-demand imbalances.

Technical Adjustment Against Backdrop of Monetary Policy Uncertainty

The December FOMC minutes, disclosed on Tuesday, unveiled a cautious stance from monetary officials. The majority of participants signaled preference for pausing additional rate reductions should inflationary pressures persist. Several board members advocated maintaining the current rate environment following three cuts implemented earlier in the year to support labor market stability. These policy signals create a complex backdrop for safe-haven assets like silver, though persistent geopolitical risks—encompassing Russia-Ukraine negotiations, escalating Middle East tensions, and US-Venezuela frictions—continue supporting demand for precious metals as portfolio hedges.

The current technical retreat in silver futures price action appears transitional, with the underlying 2025 bull thesis intact given the convergence of industrial demand strength, geopolitical risk premiums, and China-driven speculative positioning.