*Silver (XAGUSD) Price Forecast: Bullish Structure Intact After Sharp Pullback*
By Bruce Powers
January 5, 2026, 21:40 GMT+00:00
Silver has rebounded from a key 10-day support level after a 38.2% retracement, signaling a potential trend continuation. However, heavy selling near record highs suggests that further consolidation risk remains.
*Short-Term Strength*
Silver rallied from a 10-day average support zone on Monday, reaching a three-day high of $77.90. A breakout from an inside day has triggered and will be confirmed with a daily close above Friday's high of $74.57. The three-day breakout will be confirmed with a daily close above Thursday's high of $76.15. Near-term support is at Monday's low of $72.94, a higher daily low, and around both an uptrend line and the 10-day average.
*10-Day Average Anchors Higher Swing Low Potential*
The 10-day average represents a key dynamic support area for the short-term trend, established following the November swing low at $48.64 (C). It has been successfully tested as an area of support over the past week during the short decline following the $84.03 record high in late December. Support for the pullback was seen at a low of $70.39. Monday's bullish signs show the potential for the low to establish a higher swing low once there is a daily close above $76.15.
*38.2% Retracement Completion Supports Bullish Bias*
Silver's price action confirms dynamic support for the short-term trend, and the pullback completed a 38.2% Fibonacci retracement at $70.39. A continuation of the bullish recovery is anticipated unless the 10-day average fails as support. Signs of strength following a rapid decline to the 38.2% Fibonacci retracement zone is bullish price behavior, as it generally represents a minimum anticipated retracement in Fibonacci analysis.
*Bearish Reversal Near High Tempers Momentum*
There is some risk that bullish momentum may not be strong enough to push silver to a new trend high before a greater correction. Once a new peak for the trend was reached at $84.03, selling pressure greatly increased, and resulted in a bearish outside day with a close in the lower third of the day's range. This is bearish behavior that also resulted in a weekly bearish candle last week.
*Extended Gains Place Silver Near Critical Resistance*
Increased selling pressure, represented by candle formations, suggests that a new trend high may not occur quickly, even though the trend structure shows that it might. The high day completed a couple of extended target levels and was therefore in an area of potential resistance. Moreover, at the high, silver was up by $29.79 or 54.9% from the most recent bull breakout level of $54.49. This puts silver in a critical location, given key support and its new approach towards the $84.03 record high.