Silver (XAG/USD) experienced a modest uptick on Thursday but continued to display a bearish near-term outlook, with prices capped below the $74.00 mark and heading for a four-week decline [1]. The precious metal has faced pressure this week due to recent developments in the Middle East, which have dampened hopes for a swift resolution to the ongoing war and increased demand for the safe-haven US Dollar [1]. Although risk aversion eased slightly following news of a ceasefire agreement between Israel and Lebanon, investor sentiment remained cautious amid ongoing uncertainty and stalled negotiations between the US and Iran [1].
US economic data further contributed to silver's weakness. The ISM Services Purchasing Managers’ Index (PMI) released on Wednesday indicated robust sector expansion, and the prices paid subindex surged at its fastest rate in nearly four years, reflecting heightened inflationary pressures from rising energy costs [1]. This data reinforced expectations that the Federal Reserve may be compelled to hike interest rates in late 2026 or early 2027, which has supported the US Dollar and weighed on precious metals like silver [1].
Technically, XAG/USD traded at $73.16, maintaining a bearish tone within a descending channel. Momentum indicators such as the Relative Strength Index (RSI) near 38 and a negative Moving Average Convergence Divergence (MACD) histogram further supported the bearish outlook [1]. Attempts at recovery were capped below the previous support at $73.90, with significant resistance at the weekly high of $77.00 and the channel top near $77.50 [1]. On the downside, support levels were identified at $72.50, $71.79 (May 28 low), $71.55 (channel base), and $70.86 (late April low), which are likely to attract sellers if the decline continues [1].
CONCLUSION
Silver remains under pressure, trading below $74 as geopolitical uncertainty and strong US economic data bolster the US Dollar and dampen precious metals. Technical indicators and key support levels suggest a continued bearish outlook in the near term. Market participants are closely watching for further developments in the Middle East and US monetary policy for future direction.