Silver Price Forecast Signals Potential Gains Despite Current Pullback to $113

Silver’s dramatic rally continues to dominate market sentiment, even as the precious metal retreats from its stunning January record high of $121.66. Trading around $113.30 during Asian hours, XAG/USD remains positioned for exceptional gains—currently up more than 60% for the month amid swirling macroeconomic and geopolitical uncertainties. While profit-taking has temporarily halted silver’s impressive seven-day winning streak, the underlying fundamentals supporting the metal appear far from exhausted.

Technical Correction After Record Highs

The pullback to $113 levels reflects a natural consolidation phase following the explosive rally that pushed silver to fresh all-time highs. When any asset rises this rapidly—particularly precious metals that attract both retail and institutional investors—some degree of profit-taking becomes inevitable. However, the fact that silver maintains levels substantially above historical averages underscores the strength of the current uptrend and suggests this correction may provide opportune entry points rather than signal a trend reversal.

Geopolitical Tensions Reinforce Safe-Haven Demand

A critical factor behind silver’s extraordinary performance lies in escalating regional tensions. Iran’s explicit warning that it would “defend itself and respond like never before” following threats from President Trump has kept global anxiety elevated. The situation intensified further when the European Union formally designated Iran’s Islamic Revolutionary Guard Corps a terrorist organization, signaling stronger international alignment. Moreover, reports of increased US military positioning near Iran, coupled with Tehran’s announcement of large-scale military drills in the strategically critical Strait of Hormuz, have created a geopolitical environment where investors actively seek safe-haven assets—precisely the role silver fulfills as a precious metal alternative to volatile equities.

Dollar Weakness and Federal Reserve Uncertainty Bolster Silver

Beyond geopolitical concerns, silver has received substantial support from developments in US monetary and currency markets. President Trump’s recent downplaying of the dollar’s four-year lows, combined with intensifying tariff threats and public criticism of the Federal Reserve, has created an environment where confidence in dollar-denominated assets has meaningfully weakened. This uncertainty surrounding US asset valuations naturally diverts capital toward alternative stores of value like silver. Meanwhile, the Fed’s decision to maintain steady interest rates—attributed to resilient economic activity and signs of labor-market stabilization—has done little to reverse the dollar’s weakness, particularly given Trump’s anticipated announcement regarding Fed Chair Jerome Powell’s replacement. Market participants currently anticipate the Fed’s next rate reduction coming in June, further supporting the case for precious metals in a lower-rate environment.

Outlook: Silver Price Forecast Remains Constructive

Despite the current consolidation, the silver price forecast remains distinctly positive. With multiple support factors in place—geopolitical risks refusing to dissipate, dollar sentiment remaining fragile, and Federal Reserve policy subject to political pressure—silver appears well-positioned to challenge its recent highs anew. The 60% monthly advance, while extraordinary by most standards, reflects the convergence of distinct macro and geopolitical narratives that show few signs of resolution. Investors monitoring this space should watch the $113 support level closely; a sustained break below this point could signal deeper correction risks, while holding above it would suggest the recent record highs remain in play.