A strong US dollar and technical breakdown drag silver prices lower, with silver falling to a nearly two-week low and increasing bearish pressure
Recently, risk aversion sentiment in the global financial markets has significantly increased. The situation in the Middle East remains tense, and there is still no substantive breakthrough in negotiations between the US and Iran. The market remains highly alert to transportation issues in the Strait of Hormuz and global energy supply risks. International crude oil prices continue to run at high levels, reigniting concerns about a potential resurgence in global inflation. Against this backdrop, the market has started to re-bet on the possibility that the Federal Reserve may maintain high interest rates or even raise them further in the future.
According to the latest rate expectations, traders have clearly increased their bets on the Federal Reserve maintaining a hawkish stance for the long term, which has directly pushed US Treasury yields to continue to rise. The yield on the 10-year US Treasury is currently staying above 4.68%, while the 30-year Treasury yield once rose to 5.20%, reaching its highest level in nearly 19 years.
A high-yield environment weakens the attractiveness of precious metals, as gold and silver themselves do not provide interest income. As bond yields continue to rise, market funds tend to flow into US dollar assets and the bond market.
From a technical perspective, silver's current trend has obviously weakened. Previously, the price of silver rebounded to near the 200-period Exponential Moving Average (EMA) on the 4-hour chart but failed to break through effectively, then quickly retreated—a key signal that bearish sentiment is strengthening again. More critically, XAG/USD has broken below the lower boundary of the months-long ascending channel. This means the multi-week uptrend structure has been compromised, and the short-term trend is now tilting bearish. Following the technical breakdown, many short-term long positions closed out at a loss, while bearish capital re-entered the market, further accelerating silver's decline. Observing the daily structure, silver's recent highs have continued to decline, and the price's operation center continues to fall, showing that market selling pressure is still evident. The Relative Strength Index (RSI) has now dropped to near 31, close to the oversold zone. This indicates that short-term bearish momentum is strong, but the market has not fully entered an extremely oversold state, which means there is still room for silver prices to fall further.
Meanwhile, the MACD indicator remains below the zero axis and the histogram stays negative, further confirming that the current market bearish trend has not ended. However, it should be noted that the RSI is approaching the oversold zone, meaning silver could see a technical rebound at any time in the short term. But unless the overall trend reverses, any rebound is more likely to be seen as a new selling opportunity by the market. Regarding resistance levels, $76.33 is currently the first key resistance, corresponding to the lower boundary of the previously broken ascending channel. Further above, resistance is around $78.25, corresponding to the 200-period EMA on the 4-hour chart, which has now become a clear technical supply zone. Only if silver regains stability above the $76.30–78.20 area will bearish pressure be visibly alleviated, allowing for a return to a phase of recovery. On the downside, $74 has become the current short-term key support. If this level is subsequently broken, the market may further test the $73 or even $70 whole number regions.
Editor's Summary
The current silver market has clearly entered a weak phase. Although the Middle East situation still provides some safe-haven sentiment, market funds are flowing more into the dollar and high-yield bond assets, putting continued pressure on silver. Technically, after silver broke below the key ascending channel and the 4-hour 200-period EMA, the bearish trend further strengthened. Although the RSI is already near oversold, and a technical rebound may occur in the short term, with the US dollar and yields remaining strong, silver overall is still in a weak consolidation. In the future, close attention will be paid to the Federal Reserve meeting minutes, US Treasury yield fluctuations, and changes in global risk sentiment. These factors will determine whether silver can stabilize and regain upward momentum.
Editor: Zhu Henan
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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