XAG/USD Technical Correction: Silver Slides from Record Highs Amid Peace Talks and Geopolitical Tensions

Market Pullback Triggered by Multiple Factors

Silver (XAG/USD) has experienced a significant retreat from its historic peak of $86.00 reached early Monday, currently trading near $74.92 levels. This $11+ decline stems from shifting market sentiment following recent statements by US President Trump regarding potential peace negotiations in Ukraine. During a joint appearance with Ukrainian President Zelenskyy on Sunday evening, Trump indicated that a resolution in Ukraine appears “considerably nearer,” though substantial challenges persist. The prospect of de-escalation has prompted investors to reassess their safe-haven positioning in precious metals.

Simultaneously, geopolitical developments in the Asia-Pacific region are adding layers of complexity. China has announced “major” military operations in the vicinity of Taiwan, with Taipei reporting multiple Chinese military vessels detected near territorial waters. Such escalations typically create competing narratives for risk assets—while peace developments reduce precious metal appeal, regional tensions could theoretically provide counterbalance by maintaining demand for safe-haven investments.

Technical Setup: Neutrality at a Critical Juncture

The 4-hour timeframe reveals XAG/USD approaching the 21-period Simple Moving Average positioned around $74.00, which currently acts as a stabilizing floor and reflects the underlying uptrend structure. The Relative Strength Index has normalized to 54.79 after previously trading in overbought extremes, indicating momentum exhaustion from the preceding rally. The Moving Average Convergence Divergence indicator has transitioned into negative territory toward the zero line, suggesting diminishing bullish acceleration.

Key support zones emerge at $72.60, previously tested on December 24, and the $69.60-$70.20 range where the 50-period SMA converges with significant December lows and highs. Resistance materializes at the $80.00 round number, which will determine whether buyers can attempt a reconquest toward the prior all-time high of $85.87. For traders managing positions equivalent to 200,000 USD equivalent levels, these technical boundaries become particularly relevant for risk management and position sizing.

The corrective phase remains bounded within a legitimate consolidation pattern, with the technical structure preserving the longer-term bullish bias despite near-term headwinds from favorable Ukraine developments and shifting capital allocation strategies.