Silver price drops around 2.5% after strengthening U.S. dollar pressures silver

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Silver slides 2.45% to $58.52 today

Highlights

Geopolitical risks, including Iranian attacks in the Strait of Hormuz, have intensified risk aversion and pressured silver prices lower.
A stronger US dollar has further reduced demand for silver by diminishing the appeal of dollar-denominated commodities.
Silver trades below key moving averages with persistent bearish momentum; near-term range seen at $57.55 to $59.49 with a 78% probability of further downside.

Risk aversion intensifies as geopolitical strife and strong dollar pressure silver

Geopolitical tensions, including reported Iranian attacks in the Strait of Hormuz, have contributed to increased risk aversion and a shift in market sentiment away from silver, according to Fxstreet. This was compounded by a stronger U.S. dollar, which reduced the appeal of dollar-denominated commodities, as noted by Fxempire. Technical studies from Bitcoinworld Co indicated that silver was testing key support near $59.50, with a bearish flag pattern highlighting potential vulnerability to further declines.

Bearish signals reinforce downside risk amid oversold momentum divergences

On the technical front, XAG currently trades below its 20-period moving average at $59.96, the 50-period moving average at $60.88, and the 200-period moving average at $76.68 on the H1 chart. The Ichimoku Kijun at $59.97 serves as immediate resistance. Key intraday support sits near $59.50, with a further downside trigger at $57.55 and resistance above at $59.97. The Moving Average Convergence Divergence (MACD) and Average Directional Index (ADX) both issue sell signals, reflecting weak momentum. The Relative Strength Index (RSI) is at 35.7, indicating a sell bias, while the Commodity Channel Index (CCI) and Bull/Bear Power show oversold and dominant seller momentum. Notably, Stochastic RSI signals a strong buy, diverging from other bearish oscillators and hinting at possible short-term selling exhaustion. The Awesome Oscillator supports the prevailing negative bias.

Sideways consolidation seen as volatility rises and downside risks dominate

Over the next two to three trading days, XAG is likely to range between $57.55 and $59.49, reflecting a period of heightened volatility. The probability of an upward move remains low at 22%, while there is a 78% chance of further decline. The baseline scenario anticipates a sideways consolidation within the volatility band. Should price break above resistance at $59.97, a short-term reversal may unfold, whereas a close below $57.55 would strengthen the existing downtrend and expose silver to additional losses.

Anton Kharitonov, expert at Traders Union, sees silver facing further pressure as geopolitical risks and a stronger U.S. dollar undermine sentiment. He notes the technical backdrop remains bearish with price below key moving averages and crucial support near $59.50 now vulnerable. Momentum and trend indicators confirm negative bias, though oversold signals suggest limited relief may occur. "My tactical view is defensive — unless silver breaks above $59.97, the path of least resistance remains to the downside."

Earlier, analysts noted that silver was exhibiting sustained bearish momentum amid heightened geopolitical tensions and technical weakness. The latest developments reinforce this negative outlook, with traders urged to watch for a confirmed break below $57.55 as a potential trigger for further declines in the near term.

Source of Data: XAG Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.