The recent rise in silver prices aligns with the base outlook. Supply remains tight, while demand keeps rising, driven mainly by electromobility and renewable energy. Monetary factors add further support, especially with rate cuts underway. Another 25 basis points is likely after today’s .
There is also a political angle. Jerome Powell’s term ends in the middle of next year, and his expected successor, Kevin Hassett, chosen by Donald Trump, may push for faster rate cuts in line with the President’s wishes.
With this macro backdrop, the demand story for silver still has room to grow.
US Dollar Struggles to Mount a Rebound
The value of the plays a major role in shaping silver prices because a stronger greenback tends to limit gains across the commodity market. Right now, the US dollar index is trying to stage a broader rebound, but the move is running into firm resistance near the 100.40 level.
During today’s session, ahead of the Fed announcement, the US dollar index is likely to stay within a tight range of 99 to 100.40. A breakout above this range could set up a move toward the 50%Fibonacci retracement and the supply zone near 103.40. If the Fed delivers dovish signals, the index is likely to continue moving sideways with support near 96.30.
Gold Weakens Against Silver
The strong rise in silver prices and the pace of recent gains are clear when you look at the ratio. The ratio has now dropped below 60, a level last seen in July 2021, which shows how firmly the supply side has given way.
Sellers remain in control after breaking through the key support zone near 73. This shifts the base case toward a move down to the long-term lows from early 2021, around 63. A reversal would require a climb back above 73, and that scenario feels unlikely in the near term.
Markets Watch for Signs of a Top in Silver
Silver’s sharp rise makes it hard for investors to join the trend without feeling exposed to buying at a peak. Buyers are firmly in control, and the market has moved into a wait-and-watch phase as new highs form in real time. The challenge is the absence of past reference points, which leaves little guidance on where the next ceiling might appear.
From a technical perspective, the current price range offers no clear levels for fresh buying after a pullback. The nearest potential support sits around the old highs near $50 an ounce. A correction of that size could happen only if the Federal Reserve delivers a hawkish surprise and skips a rate cut, which seems less likely. Under any other scenario, it is hard to build a case for sustained declines this year beyond ordinary, short-lived corrections.
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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.
