Sudden intraday selloff sends Silver nearly 6% lower

Traders Union
All News
Financial News
Silver slides 5.97% to $78.52 today

Highlights

Global silver demand is rising due to strong clean energy and industrial usage, contributing to a sustained supply shortfall.
India increased customs duties on imported silver from 6% to 15%, boosting domestic prices despite underlying market pressure.
Technicals show overall bullish trend support and a high probability of gains, with $76.00 as key support and $82.00 as resistance amid elevated volatility.

Supply deficit widens as industrial demand and India taxes tighten market

Global demand for silver has been reported to increase, driven primarily by clean energy and industrial applications, which has tightened physical supply in the market. The Silver Institute has confirmed an ongoing supply deficit for the metal, marking the sixth consecutive year of expected shortages, further restricting available inventory. In addition, local authorities in India have raised the customs duty on silver imports from 6% to 15%, making imported silver more expensive and supporting domestic market prices, though price action has remained under broader selling pressure.

Momentum mixed as overbought signals clash with upside indicators

Technical analysis highlights that XAG remains above the MA-20 ($77.76), MA-50 ($75.53), and MA-200 ($72.80), with the Ichimoku Kijun currently set at $80.13 and acting as immediate resistance. The session saw a gap down from $83.50 to $81.39, and price now trades near the lower bound of today’s range, marking a period of heightened volatility. Momentum indicators are mixed: the D1 MACD and ADX suggest ongoing upward momentum, the RSI is supportive, but both the CCI and Stoch RSI report overbought conditions, while the BBP also signals an overbought market and sharp intraday selling diverges from the underlying daily momentum signals.

Upside bias prevails as volatility narrows consolidation range

In the short term, the price is expected to fluctuate within a volatility band between $76.00 and $82.00. The probability of further gains for XAG is assessed at above 80%, making additional declines less likely over the coming sessions. Baseline scenario features XAG consolidating between support at $76.00 and resistance at $80.13 (Kijun), with a close above resistance opening a potential test of $82.00. Only a break below the lower boundary would suggest deeper correction risk, though this remains a low-probability scenario within the current trend.

Anton Kharitonov, expert at Traders Union, sees the recent drop in silver as a reaction to short-term selling pressure, despite strong demand signals from clean energy and ongoing supply deficits. He notes that XAG holding above key moving averages shows technical resilience, but highlights that India’s import duty hike adds complexity to the outlook. The analyst remains cautious, emphasizing the risk of further declines if $76.00 support fails. "Until silver reclaims $80.13, I prefer to stay defensive and wait for clearer trend confirmation."

Earlier, analysts noted that silver’s sustained rally was underpinned by regulatory actions and persistent supply risks, while cautioning that overbought conditions could heighten volatility. The current decline, despite ongoing supply deficits and resilient trend signals, highlights the importance of monitoring the $76.00 support level as a break below could signal a shift toward deeper corrective territory.

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.