Silver price forecast as the recent surge fades

Silver price entered the new week on a high; rallying to a fresh 13-year high. It has surged by over 25% year-to-date as optimism over the US-China trade talks sustains it above the crucial resistance-turned-support zone of $34.00. At the time of writing, the precious metal was at $36.23.

In addition to the highly anticipated trade talks, a significantly high gold/silver ratio highlights silver price potential to catch up with gold, which has been on an uptrend for months now. A spillover from the bullion’s rising prices is also set to benefit silver price.

Market digests Chinese data amid optimism over trade talks

In early Monday session, silver price reached a fresh 13-year high after surpassing the gains reached late last week. This comes ahead of the highly anticipated trade talks between Beijing and Washington. Trade tensions between the two large economies appear to be easing with China said to have given temporary approvals for the exportation of rare earths. 

The government had tightened control on the exportation of these minerals as leverage during negotiations with President Trump. At the same time, US-based Boeing has commenced commercial jet deliveries to China.  

This optimism has offset the underwhelming Chinese export data with the market hopeful that the trade talks will boost June’s figures. Official numbers released early on Monday showed that the country’s exports to the US dropped by 34.5% from a similar period in 2024. Notably, this is the sharpest plunge since the COVID-19 era in February 2020. 

The figures underscore the impact of Trump’s aggressive tariffs on China and its other trading partners. However, with the expected breakthrough in US-China talks, June will likely show some recovery being the first full month where Chinese exports to the US enjoy eased tariffs. 

Elevated gold/silver ratio points to further silver gains

Gold / silver ratio is used as a measure of value, highlighting the number of silver ounces it takes to buy one ounce of gold. The higher the ratio, the more silver ounces needed to purchase an ounce of gold.  

In late April, gold price hit a fresh all-time high at $3,502 while silver price lacked enough bullish momentum to break the crucial resistance zone of $34. This divergence pushed the gold/silver ratio to COVID-19 levels at 107:1. 

While it has since eased to the current 91:1, a figure above 80:1 points to silver being undervalued. Seeing that silver price is still significantly below its all-time high of $50, it has the potential to catch up to its more lustrous cousin, gold. Furthermore, the spillover from gold, currently trading at $3,318 will benefit silver price and other precious metals. 

Silver price technical analysis: Here’s what to expect

Silver price chart | Source: TradingView

Silver price has extended gains from late last week; trading in the green for the third consecutive session. At the time of writing, it was at $36.30; marking a surge of over 25% year-to-date. 

Besides, the rallying has pushed it to the overbought territory with an RSI of 71. Seeing that it has been trading along the upper Bollinger band, it is likely that silver price will record a corrective pullback before rising further.

In particular, the range between the 13-year high of $37.50 and the resistance-turn-support zone of $34.85 will be worth watching. Even with a further pullback, this thesis will remain valid for as long as silver price stays steady above the crucial support level of $34.00. This means that the precious metal will still be trading between the upper and middle Bollinger bands. Learn more about such setups in this guide on how to trade silver.