Silver price holds above $32.5 amid geopolitical risks and Fed policy
Geopolitical and trade-related developments could keep silver supported
Silver price has maintained its bullish momentum in February, posting a 4% month-to-date gain as it enters the final trading week of the month.
The metal opened the new week at $32.5, a key support level, before rising to $32.75 during the Asian session. It is currently trading near $32.65 in the European session, with the longer-term trend still pointing higher.
The bullish trendline from previous weeks reinforces support at $32.5, while the daily RSI remains in bullish territory, suggesting further upside potential. However, the short-term outlook appears more uncertain, as the 4-hour RSI remains in bearish territory, raising concerns about the strength of the support level in the near term.
Silver price dynamics (Jan 2025 - Feb 2025). Source: TradingView.
Geopolitical risks and Fed policy shapes Silver price outlook
Macroeconomic factors continue to play a crucial role in shaping silver’s price trajectory. The prospect of the Federal Reserve keeping interest rates restrictive for an extended period weighs on non-yielding assets like silver, potentially capping gains. Higher interest rates increase the opportunity cost of holding precious metals, making them less attractive relative to interest-bearing alternatives.
At the same time, geopolitical and trade-related developments could keep silver supported. Market participants are closely monitoring former U.S. President Donald Trump’s proposed tariff agenda, which includes potential duties on lumber, automobiles, pharmaceuticals, and semiconductors. If implemented, these tariffs could contribute to a slowdown in global economic activity, driving safe-haven demand for silver.
Investors are also focused on diplomatic efforts between the U.S. and Russia regarding the war in Ukraine. Trump has reportedly agreed to further talks with Russian President Vladimir Putin in pursuit of a truce, adding another layer of uncertainty to global markets.
In the near term, silver’s ability to hold above $32.5 will be key to determining its next move. A break below this level could shift momentum downward, while continued strength above it may keep the metal on track to extend its February gains.Silver pulls back to $32.75, where it found support at the 100 EMA and Fibonacci golden ratio. Optimism over U.S.-China trade talks reduced safe-haven demand, limiting silver’s gains.
