Silver prices are holding steady around $54.00 after a recent rise of nearly 8% this week. However, the XAG/USD metal is finding it tough to surpass the $54.40 mark, primarily due to a stronger US Dollar. The US Dollar Index has shown a slight increase, influenced by US Treasury yields. Nonetheless, expectations for a Federal Reserve rate cut continue to support silver’s strong demand.

Technical Analysis for Silver

From a technical standpoint, momentum is still positive, with oscillators indicating favorable levels. A crucial support level is at $53.50, while resistance levels are at $54.40 and $54.85. Silver is a trusted investment option, historically seen as a store of value. It appeals to traders aiming to diversify or protect against inflation. Silver prices can change due to various factors like geopolitical events, interest rates, and the strength of the US Dollar. Demand from industrial sectors, especially electronics and solar energy, also influences these price shifts. Silver’s price trends often align with those of Gold. The Gold/Silver ratio helps investors evaluate the relative worth of the two metals, providing insights into investment opportunities.

Federal Reserve Policy Impact

Guillermo Alcala is a financial news editor with experience from respected companies like FXStreet and Kantox. As the market anticipates a Federal Reserve rate cut in December, we can expect ongoing interest in silver. This week, silver has demonstrated exceptional strength, rising nearly 8% and testing the crucial resistance level around $54.40. This situation creates a clear opportunity for trading strategies in the upcoming sessions. This outlook is supported by the latest Consumer Price Index (CPI) report for October 2025, which showed inflation easing to 2.8%, along with lower-than-expected Non-Farm Payrolls of just 150,000. A weaker dollar, which has trended downwards throughout the fourth quarter, is likely to result from this policy shift. This setting is very beneficial for dollar-denominated assets like silver. Investors might consider buying call options with strike prices at or above $55 to take advantage of a possible breakout above the $54.40 resistance. A significant move above this level could lead to a multi-year high of $54.85 and even reach our Fibonacci target of $56.60. Additionally, opening long positions in futures contracts could be worthwhile on a confirmed break. However, today’s rejection at $54.40 could signal a phase of consolidation or a pullback before any further upward movement. To mitigate risk, purchasing put options with a strike near the $52.70 support level could serve as a protective measure for our long positions, guarding recent gains if the dollar unexpectedly strengthens. We recall how the Federal Reserve’s aggressive rate hikes in 2023 depressed precious metal prices, and it now appears we may be witnessing a reversal of that trend. Moreover, strong industrial demand from solar and EV manufacturing gives silver a solid long-term boost. The Gold/Silver ratio’s recent drop from 75 to around 60 also indicates that silver could be outperforming gold in the near future. Create your live VT Markets account and start trading now.

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