July 5, 2026
As of July 3, 2026, by Florian Grummes
Since the end of January, precious metal prices have been in a pronounced correction phase. Following the increasing downward momentum of the past four weeks—which culminated in an escalation and ultimately a clearly recognizable final capitulation—there are now growing signs that precious metal prices are regaining their footing and are on the verge of a major recovery.
On the gold market, the break below the key support zone around $4,400 since early June led to an accelerated sell-off, which recently pushed prices down three times to the $3,940–$3,960 range. Apparently, as prices dipped just below $4,000, more buyers returned to the market, allowing the gold price to recover significantly—by as much as $250—over the past two trading days.
Short Squeeze Following Price Plunge
Silver exhibited an even more pronounced pattern characterized by high volatility: The surprisingly dynamic, yet unsustainable, price surge to $89.37 in the first half of May was followed by an even more severe sell-off. Within six weeks, the price fell sharply, dropping by 29.5% to $55.59. Unlike gold, however, the low of June 24 has not been breached in the past nine days, despite all efforts by the bears. Instead, the short squeeze in the silver market has so far led to a rebound of 13.1%.
Early-summer bottom taking shape
We have pointed out several times in recent weeks that the combination of capitulation by weak hands (high gold ETF sales), favorable seasonality starting in July, increasingly fearful sentiment, and a completely oversold technical market should bring about an early-summer bottom. Accordingly, the odds are now good that the gold price can recover toward its 50- and 200-day moving averages in the range around $4,500.
For the silver price, levels around $70 would at least be conceivable.
Market Correction and Further Shift Toward the East
In any case, the five-month price decline in precious metals appears to have halted for the time being. While silver has more than halved in price since its high at the end of January, Western bullion banks used the period of weakness to systematically reduce risk in the futures markets: short positions were significantly reduced, and open positions were scaled back.
However, the geopolitical cost of this development is considerable. China specifically capitalized on the low prices and accumulated large quantities of physical metal—several hundred metric tons of gold and an estimated up to 2,500 metric tons of silver. This market correction was accompanied by a decline in open interest to its lowest level in decades, as well as additional price losses in the wake of the recent COMEX collapse. The bottom line is that a structural shift is continuing: While the West is cleaning up its books, physical precious metals are increasingly finding their way into strong hands in the East.
Summer Rally: Proceed with Caution
Depending on how the anticipated summer rally unfolds and how the significantly overbought stock markets—which are vulnerable to a correction, particularly the parabolically rising semiconductor sector—behave in the meantime, even higher price targets for gold and silver are certainly conceivable by fall. For now, however, we do not want to get too far ahead of ourselves; instead, we intend to reassess the situation step by step and, when in doubt, would rather be pleasantly surprised.
Silver in USD – Support around $55 has held
Silver in U.S. dollars, daily chart as of July 3, 2026. © GOLD.DE
Starting from the new all-time high of $121.67 on January 29, 2026, the silver price has so far fallen back in three distinct downward waves to its most recent low of $55.59. This has corrected nearly the entire upward move since the breakout above the $50 mark last fall.
However, the broad range between $45 and $55—at the center of which lies the previous decades-long high of $50—should provide extremely robust support and has so far withstood its first stress test.
Oversold and Ready for a Rebound
Now that silver has returned to this range in a heavily oversold state, the chances of a significant rebound are very good. Ideally, the entire correction over the past five months can be interpreted as a falling wedge, which could set the stage for a strong upward breakout in the medium term.
At the same time, the path upward is littered with significant resistance levels. A key factor in the coming weeks will be a push toward the prominent resistance zone around $70. This zone converges the slightly rising 200-day moving average ($69.83), the falling 50-day moving average ($71.32), and a dominant downtrend line.
Patience Rather Than Momentum
However, an initial bounce off the moving averages is very likely, and silver is likely to need considerably more time to build new, sustainable upward momentum.
Recovery with Clear Price Targets
In the short term, however, the signals pointing to an impending major recovery clearly predominate.
The 38.2% retracement of the downtrend since mid-May, at around $68.50, can be viewed as a minimum target. If, following a temporary pullback, a breakout above the moving averages occurs, price targets in the range of $75 to $78 will come into focus.
Overall, there are increasing signs that precious metals have formed a solid bottom following the turmoil of recent weeks and that the summer rally has already begun.
Conclusion: Silver – Signs of a Summer Rally Are Emerging
Recent price movements in the precious metals markets suggest that the five-month correction phase may have reached its preliminary low. In recent weeks, both gold and silver have exhibited the combination of oversold conditions, extreme sentiment, and capitulation signals that often marks the transition from a downtrend to a recovery phase.
In particular, the strong short squeeze of the last two days suggests that in the coming weeks or over the next one to three months, buyers will regain control of price movements.
Now that the breakout zone around $55 has held, the silver price has considerable potential for recovery given the overall sharp sell-off. Our first moderate price target for the summer rally is approximately $70. Depending on how the price develops, higher targets are also conceivable. However, the fragile situation surrounding the AI and data center boom, as well as the increasingly precarious outlook for the semiconductor sector, lead us to remain deliberately cautious.
Source：https://goldinvest.de/en/silver-and-gold-ahead-of-the-summer-rally-is-the-rally-about-to-begin
