New York, January 1, 2026
Silver Futures Face Potential 50% Drop Despite Industrial Demand
A confluence of factors, including shifting interest rate expectations and technical chart patterns, suggests silver futures could shed half their gains this year.
- Silver futures closed 2025 at $70.896, down from a peak of $82.615.
- The Federal Reserve’s December meeting revealed a split among policymakers regarding interest rate cuts.
- Technical analysis points to potential support levels at $55.677 and $53.343.
- Geopolitical tensions, despite surging, haven’t been enough to offset the impact of rate cut expectations.
Silver futures are poised to give back a significant portion of their 2025 gains, even as industrial demand remains robust. A selling spree originating from a tested peak of $82.615 pushed futures back to $70.980 by the close of the year. The market’s trajectory hinges on evolving expectations for Federal Reserve policy.
A major pullback was observed in December 2025, following a rally that tested a low of $28.179 in August 2025 and ultimately reached $82.615. The year ended at $70.896 amid waning anticipation of further easing in interest rates—a sentiment confirmed by the release of the Federal Open Market Committee (FOMC) minutes from its December 9-10 meeting this week.
The FOMC minutes revealed a deeper divide among the 19 policymakers. Six officials signaled opposition to rate reductions, advocating for the benchmark rate to remain at 3.75% to 4% through the end of the year, the level prior to the December meeting. Some officials indicated that, “it would likely be appropriate to keep the target range unchanged for some time after a lowering of the range at this meeting.”
While the median projection from officials suggested a quarter-point cut in 2026, individual forecasts varied considerably. Investors, however, are anticipating at least two reductions in the coming year.
What does this mean for silver investors? Technical formations paint a concerning picture for silver bulls in 2026. The rally experienced in 2025 propelled futures into overbought territory, fueled by geopolitical concerns and expectations of Federal Reserve rate cuts. Despite a 43-day government shutdown delaying relevant data in October 2025, bullish momentum persisted.
Despite ongoing geopolitical tensions, particularly involving the U.S. and Iran, diminishing expectations for interest rate cuts are weighing heavily on silver futures. An accelerating slide appears likely to breach significant support at $67.921 in January 2026, impacting all precious metals due to the shifting rate cut outlook.
Technical Levels to Watch
In a monthly chart, silver futures may struggle to defend immediate support at $70.896 in January 2026. The futures are still trading above the ‘Handle’ of the “Cup & Handle” formation, but a move back to $55.677 is possible. A breakdown below this level could push futures to test significant support at $53.343. Conversely, a sustained move above $73.461 could open the door to testing the next resistance at $79.698.
In a weekly chart, a “dark cloud” formation suggests continued selling pressure, despite potential short-lived bounce-backs from this week’s lows. The selling spree is likely to persist.
In a daily chart, silver futures are trading below the immediate resistance at the 9-day Exponential Moving Average (EMA) at $72.178. An exhaustive candle formed on December 31, 2025, suggests a move below the 20-day EMA ($66.575), potentially testing the 50-day EMA at $57.186. A sustained move above the 9-day EMA ($72.18), however, could drive futures to test the next resistance at $75.725.
Disclaimer: Readers are advised to take any position in silver futures at their own risk, as this analysis is based only on observations.
