Silver Price Forecast: Silver retreats from seven-week highs

Silver (XAG/USD) reverses sharply lower on Thursday after briefly testing $33.70, its highest level in seven weeks, showing signs of near-term fatigue after a strong upside breakout on Wednesday to trade around $32.95 during the American session. The pullback was driven by a mild rebound in the US Dollar and a technical rejection below the $34.00 psychological level near April’s high.

The pullback in the white metal was ahead of the US Purchasing Managers Index (PMI) release, indicating that the retreat is primarily technical and driven by early US Dollar stabilization and profit booking following a sharp breakout on Wednesday.

However, from a technical perspective, the broader trend bias still appears constructive, with Silver maintaining key structural support. The daily chart highlights a clean breakout from a multi-week symmetrical triangle formation, which had been compressing price action continuously since early May. Spot prices surged through the descending trendline resistance on Tuesday, with follow-through buying lifting the metal toward the $33.70 handle — a level not seen since early April.

Thursday’s decline appears to be a classic breakout retest, with price action cooling off toward the $32.50–32.70 support zone. This region is technically significant, aligning with the 21-day Exponential Moving Average (EMA) and the former resistance line of the broken triangle. So far, the market has respected this area, suggesting that buyers may still be in control of the broader trend despite the short-term pullback.

Momentum indicators reflect a market in transition. The Relative Strength Index (RSI) hovers near the neutral 52 level, showing no immediate overbought conditions but signaling a loss of bullish momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram remains marginally positive, with the signal line still below the MACD line, indicating that the bullish crossover earlier this week may still be in play, though it's showing early signs of flattening.

From a macro standpoint, the US Dollar Index (DXY) steadies below the 100.00 mark after a three-day slide. The rebound comes ahead of the S&P Global US PMI data, which later surprised to the upside. However, Silver’s pullback had already begun before the data release, suggesting that technical flows, rather than macro-driven, were driving the price action.

Looking ahead, sustained support above $32.50 will be key to preserving the bullish breakout structure. A daily close below this level would undermine the pattern and could open the door for a deeper correction toward $32.00 and beyond. On the upside, a move back above $33.50 would encourage fresh buying and pave the way for a retest of the April highs near $34.25.