Published on: 2026-01-28
Silver has begun 2026 in a way that forces traders to acknowledge two truths simultaneously. The long-term trend is still pointed higher, and the short-term risk of a sharp pullback is also elevated.
As of the latest read, XAG/USD is trading around $115 per ounce, with a 52-week range of $28.1583 to $117.7363. That is a reminder that this has not been a typical grind higher. It has been a momentum market that can travel quickly in either direction.
That matters because the question today is not only whether silver can continue its bull rally. The question is whether the upcoming few sessions bring a sharper pullback after a near-vertical run.
Silver's recent price action is not "normal." It has been fast, wide, and headline-driven.
This week included one of the sharpest bursts in modern silver history.
Firstly, silver futures jumped 14% in a single session to around $115.08, the biggest one-day gain since 1985.
Silver also surged nearly 15% to around $117.7 during the same risk-driven push into precious metals.
Moves like this often create a "hangover" phase in which the price fluctuates and declines, even as the larger trend remains upward.
TradingEconomics, which tracks a benchmark price via a CFD reference, reported silver up about 55% over the past month as of late January.
Additionally, silver closed above $100, logging one of its strongest monthly runs in decades.
A clean six-month return depends on the exact benchmark (spot, futures, or a specific fixing). What is not in dispute is direction and speed.
According to data research, silver was up by more than 240% over the past year, while warning that such gains can lead to violent reversals because silver is less liquid than gold.
For traders focused on "coming days," the key point is simple: after this kind of rally, even a normal correction can look dramatic on the chart.
A near-term pullback risk is high because silver has already shown classic "blow-off" behaviour: a rapid surge to record highs, followed by fast profit-taking and large daily ranges.
For example, after trading above $117, silver prices dropped sharply and later steadied near $105.52, highlighting the market's concern about volatility.
At the same time, this is not a simple bearish story. The overall trend remains strong, bolstered by a weakened U.S. dollar, robust physical demand indicators, and market tightness in certain areas.
Simply put, here is the balance:
Why silver could decrease soon: Profit-taking after a historic rally, mixed momentum signals, and the risk of a short-term bounce in the U.S. dollar or real yields.
Why silver might hold up: Continued demand for hard assets during policy and geopolitical noise, plus signs of tight physical supply and strong Asian buying interest.
When silver breaks into fresh highs, short-term traders often front-run each other on exits. That can turn a healthy pullback into a fast slide.
The market just experienced record-style gains in a very short window. The speed of the move stressed that silver's lower liquidity can amplify volatility once momentum flips.
In practical terms, this means silver can fall for reasons that are not "fundamental." Prices can decline when too many traders are on the same side simultaneously.
Precious metals tend to struggle when real yields (inflation-adjusted yields) rise, because holding a non-yielding asset becomes less attractive.
The 10-year TIPS real yield (DFII10) was around 1.90% on January 26, 2026, according to FRED.
If real yields push higher again, it can pressure silver, especially if the move comes alongside a stabilising dollar.
Dollar weakness has been a tailwind for metals, but FX does not move in a straight line.
For example, the dollar fell to a four-year low on January 27, 2026, with the DXY around 95.86.
When the dollar drops hard, short-covering rallies are common. A dollar bounce is one of the quickest ways to cool silver in the short term, even if the bigger narrative stays supportive.
Silver is not only a precious metal. It is also an input for industry, and industry does react to price.
For context, industrial use has grown to a larger share of total demand, and very high prices can eventually erode that demand at the margin.
This matters in the coming days because traders may start to test whether the rally is now more financial than physical.
Silver is now trading like a hybrid between a macro hedge and a high-beta momentum product, and retail flow data supports that view.
For context, U.S. retail traders were net buyers of silver ETFs, including approximately $171 million in the iShares Silver Trust during a single session, which could lead to significant turnover.
Retail participation can extend trends, but it can also amplify corrections because leveraged or fast-money positions tend to exit together when volatility spikes.
The recent rally occurred alongside heavy demand for "hard assets" during geopolitical and policy stress.
For example, investors are rotating into gold and silver as the dollar weakened and risks mounted.
When that kind of risk mood persists, dips in silver often attract fresh buying.
Another reason this silver rally has been hard to fade is that global pricing has not been uniform.
Firstly, Chinese demand has pushed Shanghai prices to a widening premium over London benchmarks, reaching more than $14. Additionally, an implied silver lease rate of nearly 3% indicates that borrowing physical metal is expensive compared to a balanced market.
This matters because paper selling can push futures down for a day or two, but physical tightness can limit how far a correction travels before bargain-hunting returns.
At the same time, China can also become a timing risk. For example, profit-taking may occur before China's Lunar New Year and during the Shanghai Futures Exchange's closure from February 16 to 23.
According to The Silver Institute's deficit theme, supply constraints have remained a key focus.
A deficit story does not stop corrections, but it can keep longer-term buyers engaged when prices dip.
As the January FOMC meeting unfolds, what matters for silver is not only the decision, but the market's interpretation of the path.
The statement could highlight the persistence of inflation and imply that cuts are not expected to happen soon.
The Chair could push back on easing financial conditions, which can lift the dollar and yields.
The press conference could signal that the Fed is more worried about inflation than growth.
The Fed may recognise slower economic growth and a more apparent disinflationary trend.
The Chair could frame risks as two-sided, which reduces the market's need to price higher real yields.
The tone could validate the market's current direction in the dollar, which can keep precious metals supported.
In short:
Silver is more likely to fall if the Fed's message triggers a dollar bounce and a rise in real yields.
Silver is more likely to hold up if the Fed reinforces the market's view that policy is restrictive enough and the dollar remains under pressure.
| Indicator | Reading | Interpretation |
|---|---|---|
| RSI (14) | 62.882 | Bullish momentum, but not at a blow-off extreme. |
| Stoch (9,6) | 81.186 | Overbought conditions raise near-term pullback risk. |
| StochRSI (14) | 100 | Overbought conditions raise near-term pullback risk. |
| MACD (12,26) | 1.194 | Trend-following signal remains positive. |
| MA20 (simple) | 111.1535 | First meaningful "trend support" zone in a correction. |
| MA50 (simple) | 109.9835 | A deeper pullback often tests this area in strong trends. |
| MA200 (simple) | 98.0735 | This is the long-term line that defines the broader uptrend. |
Technical signals currently indicate a bullish market, but it is stretched.
The 14-day RSI is 62.882, which is bullish but not extreme.
Momentum gauges such as Stochastics and StochRSI are flagged as overbought, which often precedes pullbacks or sideways digestion.
Moving averages from MA5 through MA200 are all showing buy signals, which is typical of a strong trend.
These levels are not "targets." They are zones where flows often change because short-term traders anchor orders around them.
| Method | Support 1 | Pivot | Resistance 1 | Resistance 2 |
|---|---|---|---|---|
| Classic | $113.4379 | $113.9702 | $114.9589 | $115.4912 |
| Fibonacci | $113.3892 | $113.9702 | $114.5512 | $114.9102 |
| Woodie | $113.6659 | $114.0842 | $115.1869 | $115.6052 |
How to Interpret It
If silver loses the pivot zone near $114 and fails to reclaim it quickly, price action can rotate toward $113 to $111, where MA20 and nearby supports lie.
If silver holds above the pivot and breaks higher with follow-through, the market tends to probe the upper resistance bands quickly because volatility is already elevated.
Silver is in a phase where scenarios are more useful than a single-point forecast.
| Scenario | What would trigger it | What it could look like |
|---|---|---|
| Base case: choppy consolidation | No major macro shock, steady risk mood | Sideways range trading, sharp intraday swings |
| Bearish: deeper pullback | Profit-taking accelerates, dollar and real yields rise | Break below key supports and faster downside |
| Bullish: renewed breakout | Dollar stays weak, safe-haven demand returns, physical tightness stays visible | Quick recovery and another push toward recent highs |
The key message is that silver can fall in the coming days without "breaking" the larger trend. After a historic rise, a pullback can be a regular part of the price discovery process.
Silver is a smaller, less liquid market than gold, which means large flows can influence prices more quickly. Recent record moves have also encouraged short-term trading and profit-taking, which increases daily swings.
Both matter, but the dollar often acts faster. A sharp dollar bounce can quickly cool silver, while a steady weak dollar can keep dips supported.
Several short-term indicators are overbought, including Stochastics and StochRSI. The RSI is bullish but not extreme. This mix often signals that the trend is positive, but the market is vulnerable to sudden pullbacks or sideways consolidation.
In conclusion, silver may certainly decline in the upcoming days, and the situation indicates that risk. The market has just posted record-style gains and then shown sudden reversals, which is typical when momentum gets crowded, and traders start taking profits.
Still, a pullback is not automatically bearish for the month or the year. If the U.S. dollar remains under pressure and safe-haven demand stays active, silver can find buyers quickly once the selling wave slows. The next move is likely to be decided at clear chart zones, not in headlines.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
