Silver price corrects by almost 6% to almost $86.50 during Thursday’s Asian session. The price of the white metal rebounded from its all-time high of $93.51, published on Wednesday, after US President Donald Trump said that Iran had assured that it would stop killing protesters and did not plan to carry out large-scale civilian executions, which resulted in a decline in the attractiveness of safe-haven demand.
Market sentiment remained risk-averse as US President Trump threatened military action against the government of Supreme Leader Ayatollah Ali Khamenei for executing protesters amid civil unrest in Iran. Tehran’s assurances that it will stop executing civilians downplay the risk of U.S. military action.
Meanwhile, expectations from the Federal Reserve (Fed) that it will not cut interest rates at its policy meeting later this month are also weighing on silver. Speculation that the Fed will suspend its ongoing easing campaign intensified after the release on Tuesday of US Consumer Price Index (CPI) data, which showed that price pressures remain unchanged.
Going forward, the main factor influencing the price of silver will be the announcement of a modern Fed chairman by the White House. US President Trump said in December that he would announce a successor to Fed Chairman Jerome Powell in January. Trump’s comments in recent interviews indicate that White House economic adviser Kevin Hassett, former Fed Chairman Kevin Warsh and current Fed chairs Christopher Waller and Michelle Bowman are the main contenders to replace Jerome Powell.
Silver technical analysis
At the time of writing, XAG/USD has plummeted to almost $88.50. The 20-day exponential moving average is rising and holding at $77.48, strengthening the uptrend as THE price remains well above it. Its positive slope supports the trend and keeps declines near the mean.
The 14-day relative strength index (RSI) at 68 (close to overbought) reflects mighty momentum after cooling off recent extremes, which could limit immediate upside if it stalls.
As long as the pair remains above the rising 20-EMA, the bulls will remain in control and the base case will remain an extension of the rally. A close below the 20-day EMA would shift the bias towards consolidation and create room for further declines towards the January 8 low of $73.85.
(The technical analysis for this story was written with the support of an AI tool.)
Silver FAQs
Silver is a precious metal that investors willingly trade. Historically, it has been used as a store of value and a medium of exchange. Although less popular than gold, investors may turn to silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during periods of high inflation. Investors can buy physical silver in coins or bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can fluctuate due to many factors. Geopolitical instability or fear of a deep recession may push silver prices higher due to its safe-haven status, although to a lesser extent than gold. As a non-yielding asset, silver tends to appreciate at lower interest rates. Its movements also depend on the behavior of the US dollar (USD) when the asset is priced in dollars (XAG/USD). A mighty dollar tends to keep the price of silver at bay, while a weaker dollar will likely push prices higher. Other factors such as investment demand, mining supply – there is much more silver than gold – and recycling rates can also influence prices.
Silver is widely used in industry, especially in sectors such as electronics and solar energy, because it has one of the highest electrical conductivities of all metals – greater than copper and gold. An boost in demand can boost prices, while a decrease usually lowers them. The dynamics of the economies of the United States, China and India can also contribute to price fluctuations: in the case of the United States and especially China, immense industrial sectors exploit silver in various processes; in India, consumer demand for precious metals for jewelry production also plays a key role in pricing.
Silver prices usually follow the movements of gold. When gold prices rise, silver tends to follow suit because their status as safe-haven assets is similar. The gold-to-silver ratio, which shows the number of ounces of silver needed to equal the value of one ounce of gold, can support determine the relative valuation of the two metals. Some investors may view a high ratio as an indicator that silver is undervalued or gold is overvalued. On the contrary, a low ratio may suggest that gold is undervalued relative to silver.
