Key Moments
- Silver (XAG/USD) falls to around $70.60 in early European trading, extending its recent decline.
- Comments from US President Donald Trump on Iran boost crude oil and curb rate-cut expectations, weighing on non-yielding precious metals.
- XAG/USD trades below the 100-day EMA at $73.80, with initial support at $68.00 and further downside risk toward $65.00.
Market Overview
Silver prices drop to $70.60 in early European trading on Thursday. Renewed selling pressure hits XAG/USD after remarks from US President Donald Trump on the Iran conflict. These comments have shifted sentiment across commodities and interest rates.
In a White House address, Trump said his “core objectives are nearing completion” in Iran. He also warned the US would strike “extremely hard” over the next two to three weeks.
These statements have pushed crude oil higher and reduced expectations for rate cuts. Silver, as a non-yielding metal, loses appeal when interest rates are expected to stay firm despite geopolitical uncertainty.
Technical Picture: Bearish Bias Intensifies
The near-term technical outlook for XAG/USD is now firmly bearish. The pair has fallen below the 100-day exponential moving average (EMA) at $73.80, signaling a break in the medium-term uptrend.
The Relative Strength Index (RSI) stands at 40.97, below the neutral 50 level, and continues to drift lower. This indicates that sellers remain in control after the recent retreat from overbought readings in the mid-80s.
| Technical Level | Price / Indicator | Implication |
|---|---|---|
| 100-day EMA | $73.80 | Resistance; medium-term uptrend breaks below this level |
| Bollinger middle band | $76.25 | Upper boundary of broader supply zone; caps corrective rallies |
| Initial support | $68.00 | Recent swing area to watch for downside |
| Key psychological support | $65.00 | Break below exposes deeper bearish potential |
| Lower Bollinger Band | $63.20 | Oversold conditions may emerge here |
Immediate resistance aligns with the 100-day EMA near $73.80. Above that, the Bollinger middle band around $76.25 forms a broader supply zone, likely limiting corrective gains. A sustained break above this region would be required to reduce the current bearish bias and reopen the path toward $80.00.
On the downside, first support is near $68.00. Below this, the psychological $65.00 level becomes crucial. A clear break under $65.00 could bring the lower Bollinger Band near $63.20 into focus, where oversold conditions might slow, though not necessarily reverse, the bearish trend.
Silver Market Characteristics and Drivers
Why Investors Hold Silver
Silver is a widely traded precious metal, used both as a store of value and a medium of exchange. Although it receives less attention than gold, investors hold silver to diversify portfolios, gain intrinsic value, or hedge against inflation.
Exposure comes through physical holdings such as coins or bars, or via financial instruments like Exchange Traded Funds that track international silver prices.
Key Influences on Silver Prices
Silver prices respond to many factors. Geopolitical tensions or fears of recession can lift silver as a safe-haven, though usually less than gold. As a non-yielding asset, silver also benefits when interest rates fall.
Because silver is quoted in US dollars (XAG/USD), currency dynamics matter. A strong US Dollar can pressure silver, while a weaker Dollar supports higher prices. Other drivers include investment demand, mining output, and recycling activity.
Industrial Demand as a Price Catalyst
Industrial use plays a key role in silver pricing. The metal is vital for electronics and solar energy, thanks to its superior electrical conductivity.
Rising industrial demand supports prices, while weaker demand depresses them. Developments in the US, China, and India are particularly important: the US and China consume silver across multiple industries, while India drives jewelry demand.
Relationship Between Silver and Gold
Silver often moves with gold. When gold rises, silver typically follows due to their similar safe-haven roles. Traders monitor the Gold/Silver ratio to assess relative value.
A high ratio may indicate silver is undervalued or gold overvalued. Conversely, a low ratio could suggest gold is undervalued relative to silver.
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