Silver price under pressure after three bearish days as U.S. home sales data looms
Silver price declines for third straight day, testing key $31.30 support.
Silver (XAG/USD) price has faced sustained pressure this week, erasing a significant portion of its February gains.
The metal has now logged three consecutive bearish days, with declines in the first two trading sessions of the week amounting to a 3.7% drop. Despite finding support at $31.30 reinforced by the 50-day EMA, price action has remained indecisive in the Asian and European sessions, with silver currently trading near $31.70 on Wednesday, February 26.
Technical indicators reflect this uncertain momentum. The daily RSI has shifted from bullish to neutral territory, while the 4-hour RSI remains in bearish territory without yet reaching oversold conditions. This suggests that sellers still have some control, though the market has not reached exhaustion levels that typically precede a rebound.
Silver price dynamics (Dec 2024 - Feb 2025). Source: TradingView.
Silver price forecast: Fed rate concerns and U.S. home sales data in focus
Macroeconomic factors could further weigh on silver's trajectory. Analysts suggest that former U.S. President Donald Trump’s tariff proposals have heightened inflation concerns at the Federal Reserve. This development may lead the central bank to maintain higher interest rates for longer, a scenario that historically dampens demand for non-yielding assets like silver.
Additionally, market participants are closely watching U.S. New Home Sales data for January, set to be released later today. The report is projected to show a decline to 679K from the previous 698K reading. A weaker-than-expected figure could indicate economic slowing, potentially impacting industrial demand for silver, which is widely used in manufacturing and construction.
For now, silver remains in a fragile position, with a near-term resistance level at $31.90, potentially limiting any recovery attempts and macroeconomic pressures limiting any upside potential. A sustained break above this resistance could shift sentiment, but failure to hold above $31.30 support may open the door for further declines.
Silver dipped below the $32.5 support, turning the market sentiment bearish as it dropped to $31.25. Strong industrial demand met with stagnant supply, limiting the metal’s downside.
