Silver Plunges After Record High as Strong Dollar Hits XAG/USD.
XAG/USD Analysis Today: Silver Slumps Sharply as Forced Liquidations and Stronger Dollar Weigh on Prices
What’s Happening
Silver prices have plunged sharply, with XAG/USD falling to around $102.20 after hitting a fresh all-time high in the previous session. The sudden reversal was driven by forced liquidation of leveraged positions and a rebound in the US Dollar, prompting a wave of profit-taking across precious metals markets.
Market Overview (Fundamental Analysis)
Silver came under intense selling pressure on Friday as heightened volatility triggered margin calls and forced liquidations, accelerating the downside move. After peaking at a record $121.66, the metal shed more than 12% intraday, marking one of its sharpest daily declines in recent history.
The sell-off deepened during the European session, with prices briefly sliding to $95.08 before stabilizing above the $100.00 psychological level. This move reflects a broader reassessment of highly speculative safe-haven positions as investors adjust expectations around US monetary policy.
Additional pressure has come from a firmer US Dollar and rising Treasury yields following news that Donald Trump has nominated Kevin Warsh as the next Federal Reserve Chair. Warsh is widely viewed as more hawkish on inflation and supportive of balance-sheet reduction, which has reinforced expectations of a less accommodative policy stance. This environment increases the opportunity cost of holding non-yielding assets such as silver.
Despite the sharp correction, silver remains on track for one of its strongest monthly performances on record. Ongoing geopolitical risks—particularly in the Middle East—along with broader uncertainty around global growth and US monetary policy continue to underpin longer-term safe-haven demand.
Technical Snapshot (Daily / Short-Term Overview)
| Indicator | Reading / Value | Implication |
|---|---|---|
| Trend | Uptrend | Broader structure intact |
| General Bias | Corrective / Volatile | Pullback within larger trend |
| Key Resistance | 110.50 | Recovery cap |
| Key Support | 95.98 | Near-term floor |
| RSI | Selling Zone | Oversold conditions |
| MACD | Neutral to Negative | Momentum cooling |
| Moving Averages | Above 50 & 200 SMA | Long-term bullish bias |
Technical Commentary:
Although silver remains within a broader ascending channel and above key moving averages, momentum has weakened significantly following the sharp sell-off. Oversold RSI conditions suggest selling pressure may ease, though near-term price action is likely to remain volatile as the market consolidates recent gains.
Trade Idea (Setup Section)
Trade Type: Buy Limit
Entry Level: 98.66
Take Profit: 110.50
Stop Loss: 93.35
Rationale: The setup looks to capture a potential technical rebound from key Fibonacci and channel support, aligning with the broader bullish trend despite elevated volatility.
Alternate Scenario:
If silver breaks below 95.98, prices could extend the correction toward the 90.00–92.00 zone before stabilizing.
What to Watch Next (Forward Outlook)
• US Dollar and Treasury Yield Movements
• Federal Reserve Policy Expectations and Leadership Developments
• Volatility Across Precious Metals and Broader Risk Assets
• Geopolitical Headlines Supporting Safe-Haven Demand
Key Takeaway
Silver has entered a sharp consolidation phase after an aggressive multi-week rally, pressured by forced liquidations and a stronger US Dollar. While near-term risks remain elevated, the broader bullish structure stays intact as long as prices hold above key support levels.
Q&A (SEO-Optimized Section)
What is the current silver forecast today?
The silver forecast suggests continued volatility in the short term, with prices attempting to stabilize above $100 while resistance near $110.50 caps recovery attempts.
Why did silver prices drop so sharply?
Silver slumped due to forced liquidation of leveraged positions, profit-taking after record highs, and renewed strength in the US Dollar alongside rising yields.
Is silver still bullish despite the sell-off?
Despite the sharp correction, silver remains in a broader uptrend and is still positioned for a strong monthly performance, provided key support levels continue to hold.
Disclaimer:
This market report is provided for informational and analytical purposes only. It reflects prevailing market conditions at the time of publication and does not constitute investment advice, a trading recommendation, or an offer to buy or sell any financial instrument. Market conditions may change rapidly without notice.
