Silver Price Forecast: Recent Pullback to $113 Level Offers Key Market Insights

Silver price volatility intensified this week as the precious metal retreated from its remarkable January highs, with the silver price forecast pointing toward consolidation near the $113 support level. After surging more than 60% monthly, the current pullback reflects profit-taking among traders, yet underlying demand drivers remain robust. This silver price forecast update examines the complex interplay of geopolitical risks and monetary policy shifts fueling market dynamics.

Profit-Taking Pressures Halt the Momentum

The silver price forecast framework shows clear profit-taking emerging after the metal climbed to fresh record highs near $121.66 in late January. Current trading activity hovers around $113.30, representing a meaningful pullback from peak levels but still maintaining substantial monthly gains. This consolidation pattern is typical after extended rallies, as institutional investors and traders lock in profits following the exceptional 60%+ advance witnessed in recent weeks.

Crucially, despite the retreat, silver price analysis suggests the underlying technical support structure remains intact. The $113 level has emerged as a critical floor, with market participants monitoring this zone closely for potential reversal signals.

Geopolitical Risks and the Safe-Haven Narrative

The silver price forecast outlook cannot be separated from escalating Middle Eastern tensions. Iran’s recent warnings to “defend itself and respond like never before” following Trump administration threats have heightened regional instability significantly. The European Union’s designation of Iran’s Islamic Revolutionary Guard Corps as a terrorist organization, combined with reports of increased US military activity near Iran and announced live-fire drills in the strategically vital Strait of Hormuz, have amplified geopolitical uncertainty.

Safe-haven assets like silver benefit substantially from such uncertainty. The precious metal attracts risk-averse investors seeking to protect capital during periods of elevated geopolitical tension, providing foundational support beneath the current pullback.

Federal Reserve Policy and Dollar Weakness Drive Precious Metals

The silver price forecast must account for shifting dynamics in US monetary policy and currency markets. President Trump’s recent comments downplaying the dollar’s weakness while intensifying tariff rhetoric have eroded confidence in traditional US asset strength. His anticipated announcement of Jerome Powell’s successor as Federal Reserve Chair introduces additional uncertainty around future policy direction.

Simultaneously, the Federal Reserve’s recent decision to hold interest rates steady—while acknowledging resilient economic activity and early labor-market stabilization—suggests a measured approach ahead. Market expectations currently price in the next rate cut arriving in June. These conditions create an environment where silver price strength persists, as lower real interest rates enhance the appeal of non-yielding precious metals. The interplay between Fed policy divergence and geopolitical uncertainty provides multiple layers of support for precious metal valuations.

Market Outlook: What the Silver Price Forecast Indicates

The current silver price pullback should be viewed within the broader context of multi-month appreciation and structural support from both external shocks and monetary accommodation. While profit-taking may continue to test the $113 level near-term, the silver price forecast suggests underlying bullish foundations remain in place, supported by geopolitical turbulence and a US dollar facing headwinds from policy inconsistency and rate-cut anticipation.