Silver (XAG/USD) experienced a sharp decline on Thursday, trading around $72.82 and falling nearly 3.0% on the day after briefly dipping below the $70 mark during the European session [1]. The drop was attributed to macroeconomic headwinds, particularly the ongoing US–Israel war with Iran, which has heightened geopolitical tensions and bolstered the US Dollar (USD) [1]. Additionally, rising Oil prices have fueled inflation concerns, reinforcing expectations that the Federal Reserve (Fed) will maintain higher interest rates for longer and delay potential rate cuts. This has diminished the appeal of Silver as a safe-haven asset, given its non-yielding nature [1].
From a technical standpoint, Silver remains bearish in the near term, with repeated rejection at the 100-day Simple Moving Average (SMA) around $75.63 capping upside attempts [1]. Despite the recent weakness, XAG/USD continues to hold above the 200-day SMA at $59.06, suggesting that the broader uptrend is still intact [1]. The Relative Strength Index (RSI) at 43.64 is below the 50 mark, indicating weak momentum, while the Moving Average Convergence Divergence (MACD) indicator has moved above its signal line but remains below the zero line, pointing to only modest upside attempts within a negative momentum backdrop [1].
Immediate resistance is identified at the 100-day SMA near $75.60, with a daily close above this level potentially opening the door toward the 50-day SMA at $82.90 and the February swing high at $96.62 [1]. On the downside, support is seen in the $70-$68 zone, followed by the March low near $61.01, which aligns closely with the 200-day SMA [1].
Market participants are closely watching the interplay between geopolitical risks, inflationary pressures, and central bank policy, as these factors continue to drive volatility in Silver prices. No forward-looking analyst opinions or additional market reactions were explicitly mentioned in the article [1].
CONCLUSION
Silver's recent decline reflects the impact of heightened geopolitical tensions and expectations for prolonged higher interest rates from the Federal Reserve. Technical indicators suggest continued bearish momentum in the near term, though the broader uptrend remains intact above key support levels. Investors should monitor resistance and support zones as well as macroeconomic developments for further price direction.