Rising US debt and the ongoing government shutdown heighten caution, supporting precious metals.
Technical support around $40 underpins , while resistance near $50 may trigger pullbacks.
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Silver has jumped past $40 an ounce and is now rising faster than it has since 2020. This makes it more likely that it could reach the 2011 record highs, a scenario that seemed possible but unlikely just a few months ago. If the continues or speeds up its easing of monetary policy, silver could hit $50 an ounce before the end of the year.
Meanwhile, the US government faces a potential shutdown over a budget deadlock, and an extension of current funding seems most likely. While such situations happen often, they still tend to make investors more cautious.
US Debt Surpasses Key Threshold
With Donald Trump signing the “One Big Beautiful Bill,” the US debt has room to grow further. The previous major milestone was $37 trillion, and this increase is likely just temporary before new records are set, with the current limit at $41 trillion, passed in July.
At the same time, the US government has been partially shut down since 1 October because Congress has not passed a new budget. Reports suggest a quick deal is unlikely, with the main disagreement over subsidies for Obamacare.
An agreement will eventually be reached, but both sides are using the standoff to gain political leverage. Either way, a longer shutdown combined with rising debt could increase investor caution, which may boost demand for metals like silver.
A Clear Target for Silver Buyers
Buying demand has driven silver higher in recent weeks and months. With prices rallying past $40 an ounce, silver is now close to challenging its 2011 record highs around $50. Given the strength of that level, it is unlikely to break on the first try, and sellers will probably cause at least a short-term pullback.
Because the current upward momentum has been strong and sustained, the nearest technical support is around the $40 mark, reinforced by the rising trend line.
Gold/Silver Ratio in a Downward Trend
After hitting long-term highs near $107 in April, the market has entered a clear downward trend, which has now reached a demand zone around $80.
If sellers push below this level, the next target could be the long-term lows just above $70. On the other hand, if the $80 area holds and a rebound occurs, watch for resistance around $85, where the downward trend line meets local selling pressure.
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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belongs to the investor. We also do not provide any investment advisory services.
