Silver price dips to 4-day low as technical breakdown signals further downside
Silver drops to four-day low as key support levels break.
Silver prices have extended their downward move, reaching a four-day low of $32.1, as the metal struggles below key technical levels.
The break below the $32.5 support, which previously aligned with an upward trendline and the 50-day EMA on the 4-hour chart, has shifted market sentiment toward a bearish outlook. As of February 25, silver is consolidating below this former support, and is currently trading near $31.25 in European trading hours.
The 50-day EMA and the newly formed $32.5 resistance level now present challenges to any potential recovery. Additionally, silver’s Relative Strength Index (RSI) on the 4-hour chart has moved into bearish territory, reinforcing the likelihood of continued selling pressure. If the metal fails to reclaim $32.5, prices may extend lower toward the next support level at $31.5.
Silver price dynamics (Jan 2025 - Feb 2025). Source: TradingView.
Supply-demand imbalance and fed rate cut expectations support silver outlook
Beyond technicals, fundamental factors also shape silver’s outlook. Industrial demand remains strong, driven by its applications in renewable energy, electronics, and automotive manufacturing. However, supply constraints due to high extraction costs and regulatory barriers have kept output relatively stagnant. This supply-demand imbalance may provide long-term support to silver prices, despite the near-term technical weakness.
Meanwhile, market expectations of further Federal Reserve interest rate cuts this year have kept U.S. dollar strength in check. Since silver is a non-yielding asset, a weaker dollar could help limit deeper declines in the metal’s value.
Overall, silver remains pressured in the short term due to technical breakdowns and bearish momentum. However, its industrial demand and potential Fed rate cuts could provide longer-term support.
Silver tested support at $32.5 before rising to $32.75, but the 4-hour RSI signaled weakness. Strong February gains reflected bullish momentum, but short-term uncertainty emerged.
