Silver drops as uncertain US Fed rate policy supports strong dollar

Traders Union
All News
Financial News
Silver drops 4.11% to $72.41

Highlights

US-Iran geopolitical tensions drive silver price volatility, intensifying investor uncertainty around potential conflict escalation and market disruption.
Unclear Federal Reserve interest rate direction, combined with rising crude oil prices, adds pressure to global inflation and silver's valuation outlook.
Silver trades below short- and medium-term trend levels with increased selling momentum, expected to consolidate between $70.00 and $75.00 in the near term.

Geopolitical escalation and Fed policy uncertainty drive silver volatility

Heightened tensions between the United States and Iran have intensified geopolitical risk, causing volatility in silver prices amid investor uncertainty regarding potential war escalation and its implications for global markets. Uncertainty in US Federal Reserve interest rate policy continues to impact dollar strength, further influencing silver liquidity and valuation. Rising crude oil prices, a byproduct of geopolitical disruptions, are pressuring global inflation and reinforcing policy unpredictability.

Divergent momentum signals amid strong resistance and oversold pressures

On the technical front, XAG is trading below both the SMA-20 ($76.68) and SMA-50 ($76.03), but remains above the longer-term SMA-200 at $70.68. The Ichimoku Kijun level is observed at $76.05, marking a nearby resistance area. Support is identified at the SMA-200 ($70.68), while short-term resistance stands near $76.00. Among key indicators, the ADX (28.59) highlights a persistent downtrend, with the MACD signaling a strong buy and thus creating a divergence. RSI (48.53) and CCI (–31.17) are close to neutral but lean toward the downside, while Stoch RSI (9.43) and BBP (–0.16) indicate oversold conditions and seller momentum. The Awesome Oscillator remains neutral, confirming market indecision.

Downside momentum prevails as consolidation follows intense sell-off

Over the next five sessions, silver is expected to fluctuate within a typical volatility band of $70.00 to $75.00 relative to current price levels. Probability is skewed toward further downside (over 80%), as only one of the four main weekly signals presents a bullish bias. The likely scenario involves consolidation between $70.00 and $75.00 as participants assess the recent sell-off. A decisive move above $76.00 would require strong buying activity, whereas persistent selling could push the price to retest or break below the long-term support at $70.00.

Viktoras Karapetjanc, expert at Traders Union, believes silver is currently dominated by macro uncertainty and elevated geopolitical risk. He sees a market weighing policy shifts and inflationary signals as it holds above long-term support. Price action remains pressured, but downside momentum is starting to look stretched in the short term. Analyst expects a period of consolidation while market sentiment recalibrates following the sell-off. "If inflation concerns persist and Fed signals shift, silver could quickly rebound, so I remain cautiously optimistic within the $70.00 to $75.00 range."

Earlier, analysts noted that silver was facing persistent downside pressure amid mixed technical signals and ongoing geopolitical uncertainty. With the recent acceleration of selling and deepening oversold conditions, traders should closely monitor the $70.00 support area as a pivotal threshold for potential breakdown risk or base formation.

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

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.