Silver trading started the week positively, bouncing back from Friday’s drop, where it peaked around $64.65. During the Asian session, silver was priced in the mid-$62.00s, showing a 1.25% increase and hinting at continued upward momentum. Technically, XAG/USD found support at the 100-hour Simple Moving Average, allowing it to stay above $62.00 and confirming the positive trend. However, with neutral hourly metrics and a slightly overbought daily RSI, traders should watch for challenges near $63.00. If momentum continues, XAG/USD may rise toward $63.80 and potentially surpass $64.00, challenging its recent peak near $64.65.

Downward Trends and Support Levels

If silver falls below $62.00, this could create a buying opportunity near the 100-hour SMA at $61.45. If prices drop further, they may slide under $61.00, heading toward $60.80, the previous low, which could lead to additional losses if broken. Silver, a precious metal used for both investment and industrial purposes, experiences price shifts driven by factors such as geopolitical events, interest rates, and the strength of the US Dollar. It is significantly affected by demand in electronics and solar energy and often moves in sync with gold prices. Traders use the Gold/Silver ratio to assess the value difference between these two metals. Recent price action shows that silver has a solid foundation near the 100-hour moving average, indicating that declines are being bought. For derivative traders, this may suggest selling out-of-the-money put options or implementing bull put spreads to collect premium as the uptrend continues. However, the overbought signal on the daily chart calls for caution, so it’s wise to avoid being overly aggressive with long positions at this time.

Bullish Momentum and Market Sentiment

The fundamental backdrop supports this bullish trend, boosting our confidence. Recent data from the Silver Institute for Q3 2025 showed industrial demand rising by over 7% year-over-year, fueled by increased solar panel and electric vehicle manufacturing. Additionally, the US Dollar Index (DXY) fell below 98 last week, following the Federal Reserve’s indication of pausing its rate hikes, providing a strong boost for dollar-denominated assets like silver. This rally bears some resemblance to the speculative excitement that drove silver to a record high in 2011, a time also marked by a weak dollar and monetary policy concerns. As we take advantage of the current trend, using options to manage risk is smart in case of a sharp, unexpected downturn. For immediate price targets, any sustained move above $63.00 could encourage adding to long positions, potentially targeting the next resistance at $63.80. However, if the $61.45 support level fails to hold, it may signal a slowdown in the rally. A decisive break below this level could indicate a deeper correction, making protective puts worth considering for anyone holding long futures contracts. The Gold/Silver ratio has dropped significantly, hitting a 15-year low of 48 last month, indicating silver’s recent strong performance. While this reflects strong momentum, it also suggests that silver may be becoming overpriced compared to gold. Some may consider setting up pairs trades, predicting that gold may start to outperform silver as the ratio reaches a bottom. Create your live VT Markets account and start trading now.

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