Key Takeaways
- Rebound Analysis: Silver's recent ~6% bounce from US$73.84 is identified as a corrective rebound following a significant 10.7% sell-off, indicating a "dead cat bounce" rather than a resumption of an upward trend.
- Resistance Levels: The US$79.86 level is crucial; failure to hold this level, along with a drop below US$74.07, could lead to further declines towards US$70.52 and the 50-day moving average.
- Long-term Outlook: Although the long-term bullish trend remains intact, short-term momentum is waning, suggesting a potential need for a deeper correction before a new bullish phase can begin.
Market Context
On January 8, 2026, Silver (XAG/USD) experienced a notable decline from its January 7 high of US$82.77 to a low of US$73.84. This was followed by a 6% rally, bringing the price to US$78.05 ahead of the US non-farm payrolls and unemployment rate release for December 2025.
Technical Analysis
Despite the recent rally, technical indicators suggest that the corrective decline in Silver may not be over. The analysis points to a potential mean reversion towards the 50-day moving average, estimated between US$62.75 and US$61.91, before any sustainable bullish movement can occur.
The current short-term trend bias indicates a possible down leg, with the US$79.86 level acting as a pivotal resistance. A break below US$74.07 would heighten the likelihood of further declines towards US$70.52, which also aligns with the 20-day moving average.
Bearish Indicators
The recent rally has formed a minor bearish "Ascending Wedge" pattern, suggesting a "dead cat bounce." Additionally, the hourly Stochastic oscillator indicates a bearish divergence at overbought levels, signaling that the upward momentum may be diminishing.
Alternative Scenarios
If Silver manages to close above the US$79.86 resistance, it could invalidate the current bearish outlook and lead to a retest of the US$84.03 medium-term resistance, which represents the all-time high from December 29, 2025.