Silver prices dropped over 1.80% on Tuesday, with a daily peak of $32.48 before falling below $32.00 due to risk aversion and profit-taking related to uncertainty about US trade policies. As Wednesday’s Asian session began, XAG/USD traded at $31.73.
The price reached a two-week low of $31.29 but rebounded near the 100-day Simple Moving Average of $31.20, which if breached, could lead to further declines towards $30. Buyers drove the price above $31.50, suggesting potential re-testing of the $32.00 level.
The Relative Strength Index (RSI) indicates a bearish momentum with a reading below 50, signalling a dominant selling pressure. Conversely, a rise above $32.00 could allow prices to revisit the February 25 high of $32.48, with the potential to challenge $33.00 if surpassed.
Silver is often seen as a store of value and medium of exchange, frequently traded to diversify portfolios. Factors influencing prices include geopolitical issues, recession fears, interest rates, and the strength of the US Dollar.
Industrial demand, particularly in sectors like electronics and solar energy, plays a significant role in price movements. Dynamics in major economies, especially in the US, China, and India, further contribute to fluctuations.
Silver generally follows Gold’s trends, reflecting their safe-haven asset characteristics. The Gold/Silver ratio can help gauge relative valuation, indicating whether Silver might be undervalued or Gold overvalued based on its level.
Investors should conduct thorough research and consider the associated risks when making investment decisions in these markets.
The recent drop in silver prices, losing more than 1.80% on Tuesday, reflects a shift in market sentiment. The metal peaked at $32.48 before slipping under $32.00, driven in part by growing risk aversion and traders securing profits amid uncertainty over US trade policies. As Wednesday’s session started in Asia, silver stood at $31.73 after briefly touching a two-week low of $31.29. Buyers intervened near the 100-day Simple Moving Average around $31.20, preventing a steeper decline towards the psychologically important $30.00 mark. The fact that prices rebounded above $31.50 suggests that retesting $32.00 in the short term is not off the table.
Momentum indicators show that sellers remain in control. The Relative Strength Index sits below the 50 threshold, a signal that bearish momentum continues to weigh on the market. However, if silver manages to reclaim and hold above $32.00, another move towards $32.48, last seen on 25 February, could follow. If that level gives way, $33.00 might come into focus, drawing in technical traders looking for breakout opportunities.
Beyond daily price moves, broader forces continue to shape silver’s medium-term direction. The metal remains an attractive asset both as a store of value and for its industrial applications. It is widely used in electronics and solar energy, sectors that have seen steady expansion in recent years. Fluctuations in demand from key economic players, especially the US, China, and India, add another layer of complexity to price movements.
Historical trends show that silver often moves in tandem with gold, as both metals share safe-haven characteristics. The relationship between the two can be tracked through the Gold/Silver ratio, which helps assess whether silver appears undervalued relative to gold or vice versa, offering traders another tool for decision-making.
Market participants need to carefully factor in external risks when navigating price swings. With ongoing geopolitical developments, economic uncertainty, and interest rate expectations all in play, volatility is likely to persist. No single element drives prices in isolation, so a broad perspective remains critical.
