Silver set to continue its rally after taking little breather

Silver prices reached a new all-time high, climbing above $64 per ounce, following the US Federal Reserve’s (Fed) dovish decision last week. The American central bank cut interest rates for the third time this year, which increased the appeal for precious metals as non-yielding assets.

The long-term fundamental story remains optimistic. Investment demand appears to be solid, supported by the approval for Indian pension funds to allocate money to silver exchange-traded funds (ETFs). The industrial sector also has a strong interest in the metal, which is widely used in solar energy and electronics.

The short-term outlook for the asset depends on seasonal factors. Toward the end of the year, the market often sees increased activity, but upcoming holidays may reduce trading volumes. This usually boosts volatility due to its enhanced susceptibility to all kinds of news. Expectations surrounding the publication of key data on inflation and employment in the US add to this uncertainty, as these reports will shape market forecasts regarding the Fed's next steps.

Despite strong fundamentals, the technical setup points to overheated conditions. The price reached the upper Bollinger Band near $64.4, signaling that it is approaching overbought territory and a stronger resistance level. Concurrently, the Chaikin Oscillator is declining, suggesting waning upward momentum. A broader trading range indicates increased volatility, which frequently precedes a correction or consolidation.

A breather is highly likely, as traders need to reassess the situation. The uptrend remains intact, but to rally further, silver may briefly retreat to its support levels. These circumstances provide investors with a golden opportunity to enter the market at favorable prices.

Try out the following trading strategy:

Buy silver at the current price ($62.600). Set Take profit at $65.000 and Stop loss at $60.100.

This forecast remains in effect from December 15 to December 22, 2025.