Silver price (XAG/USD) has halted its three-day decline, currently trading around $31.80 per troy ounce. Technical analysis suggests a bearish outlook, with prices below the ascending channel’s lower boundary and both the nine-day and 14-day Exponential Moving Averages.

Initial support is seen at the psychological level of $31.00, where a break could lead to further declines towards the five-month low of $28.74. Resistance levels are indicated at the 14-day EMA of $32.12 and the nine-day EMA of $32.19, with potential recovery towards the four-month high of $33.40 if a breakout occurs.

Silver prices are influenced by various factors, including geopolitical instability, US dollar movements, interest rates, and industrial demand. In particular, the dynamics of the US, Chinese, and Indian economies affect prices due to their significant silver usage.

The correlation between Silver and Gold prices often holds, with the Gold/Silver ratio providing insight into their valuation. A high ratio suggests Silver may be undervalued relative to Gold, while a low ratio implies the opposite.

What we are seeing now is a temporary pause in the downward movement, but the broader technical picture is far from reassuring. Prices remain under the lower boundary of an ascending channel, with both the nine-day and 14-day Exponential Moving Averages acting as overhead resistance. As things stand, without a decisive move above these levels, any recovery attempts may struggle to gain ground.

The $31.00 mark is psychologically important. A failure to hold above this level could open the door to much lower prices, likely bringing back the five-month low of $28.74 into view. Given the weight of prior trading activity around that region, a break below could generate downside momentum, pushing traders to adopt a more defensive stance. On the other hand, if Silver can reclaim the nine-day and 14-day EMAs and sustain levels above them, then a move towards the four-month high of $33.40 becomes viable. That would likely signal a shift in sentiment, though momentum needs to confirm any potential breakout.

Beyond the technicals, various external forces are shaping market direction. The strength of the US dollar, interest rate expectations, and geopolitical unrest all feed into pricing dynamics. With China and India being heavy consumers of Silver, any economic data from these countries should not be ignored. Industrial demand, particularly from sectors such as electronics and solar energy, continues to play a role, but macroeconomic influences often dictate short-term price swings.

The relationship between Gold and Silver remains relevant. Historically, their prices tend to move together, though not always in perfect sync. The Gold/Silver ratio remains a useful gauge of relative valuation. A jump in the ratio can indicate that Silver is lagging and potentially undervalued against Gold, while a lower ratio signals the opposite.

Given the current setup, traders should pay close attention to whether the $31.00 support holds or fails, as well as how prices react near the EMAs. If downward pressure resumes, risk management will become even more important in the coming sessions.