Silver broke key technical support levels, with analysts monitoring a potential head-and-shoulders pattern using $35.25 as the neckline and $33 as the bearish target if confirmed. The gold-silver ratio widened toward 91-94, reflecting silver’s relative weakness. Bearish divergence on lower timeframes suggested the rally’s momentum was stalling, creating a path for corrective selling.
Profit-Taking Caps Rally, But Fundamentals Stay Firm
Systematic profit-taking followed silver’s 30% first-half rally, with COMEX futures showing 1,434 contracts traded and open interest at 25,222 contracts, signaling controlled but persistent liquidation. Yet, supply deficits continue, with the Silver Institute projecting a 149 million ounce shortfall in 2025, the fifth consecutive deficit year. Industrial demand remains robust, crossing 700 million ounces on solar and EV growth.
Market Outlook: A Tactical Pullback in a Bullish Environment
The June 27 decline reflects a tactical pullback driven by ceasefire progress, Fed recalibration, rising yields, technical breaks, and profit-taking. However, structural drivers—tight supply, firm industrial demand, and historically low inventories—remain in place. Analysts see the decline as a healthy consolidation within a broader bull market, positioning silver for a potential renewed advance as underlying fundamentals reassert themselves in the coming sessions.
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Source: Silver (XAG) Forecast: Technical Analysis Sees Head-and-Shoulders Threat for Silver
