Silver prices increased nearly 2% to approximately $30.40 during European trading on Wednesday, influenced by a decline in the US Dollar amid trade war concerns between the US and China. The US Dollar Index fell to around 102.00, raising worries about potential economic impacts from new tariffs.
Market expectations for Federal Reserve interest rate cuts grew notably, with the chance of a May reduction rising to 52.5% from 10.6%. This scenario generally supports non-yielding assets like silver.
On a technical front, silver is testing a breakdown area related to an Ascending Triangle pattern, with a key resistance at $34.87. The overall trend remains bearish due to trading below the 200-day Exponential Moving Average at $30.70.
Key support is identified at the August 8 low of $26.45, while resistance is positioned at the April 4 high of $32.00. Silver’s price dynamics are closely linked to geopolitical events and economic performance in major markets.
The precious metal serves industrial purposes, particularly in electronics and solar energy, impacting its demand and price. Silver is considered a safe haven asset, typically aligning with gold price movements, while the Gold/Silver ratio aids in evaluating their relative market values.
With silver prices climbing nearly 2% to around $30.40 during European hours, the backdrop reveals a reactive market tethered firmly to developments across the Pacific. A weakened US Dollar, descending to near 102.00 on its index, brought relief to commodities, hinting at markets digesting worries over deeper trade friction. The fresh wave of tariffs projected between Washington and Beijing rattles risk sentiment. Pressure mounts as the world’s two largest economies show signs of escalation, disrupting investor confidence in the greenback.
This decline in the Dollar isn’t happening in isolation. It’s running parallel to a shift in monetary policy expectations. The probability of a Federal Reserve rate cut taking place in May has accelerated from a modest 10.6% to a more assertive 52.5%. A move like that naturally detracts from bond yields, tilting conditions in favour of assets such as silver that don’t produce income. Think of it this way: falling interest rates reduce the opportunity cost of holding non-interest-bearing instruments.
Technically, we’re now brushing up against a testing zone. The $34.87 point isn’t just a resistance level—it coincides with the ceiling of a former Ascending Triangle formation. These patterns often serve as decision points and at present, the metal is pressing into this zone while under the weight of a downward sloping trend. What’s keeping the longer-term tone cautious is that silver remains below the 200-day Exponential Moving Average, currently pegged around $30.70. That average often acts like a litmus for broader sentiment, and sitting beneath it implies a market still carrying residual doubt.
Beneath the surface, the buffer at the low seen on August 8, around $26.45, forms a nearby floor. It’s not just a random level—it held multiple tests and touches, making it a sentiment anchor point. On the upper end, $32.00, which was reached in April, forms the next visual barrier should upward momentum stick. These bands become particularly useful for traders managing entry or setting stop-loss and take-profit targets.
Beyond charts and yields, it’s worth remembering that silver isn’t just a store of value. Its industrial use in electronics and solar arrays means any uptick in tech manufacturing or renewable investment often leads to real-world buying pressure. This isn’t speculation, it’s demand tied directly to production cycles.
We also continue to see a relationship with gold. Investors tracking the Gold/Silver ratio will observe how value rotates between the two metals. That ratio isn’t a perfect predictor, but it often flags when one metal might be priced out of sync with the other. Traders aiming to hedge or rebalance multi-metal positions lean on this comparative measure for entry or exit timing.
From a strategic position, conditions like this prompt attention to both macro and chart levels. With the Fed pressured and international tensions brewing, directional bets should be measured, allowing space for re-evaluation. What matters in the near term is how resistance zones hold and whether the broader commodity space catches a tailwind if inflation expectations shift.
