Silver is currently holding steady near record highs at around $93.90, following a reduction in tensions between the US and EU, which has reduced safe-haven demand. President Trump’s choice not to impose tariffs on European nations has eased market fears, while tight supply and strong industrial demand are maintaining silver prices. Even with the easing trade concerns, silver continues to perform well both as an investment and an industrial metal. This month, silver has risen by 32%, showing a strong upward trend. On the technical side, silver is testing the 21-period simple moving average (SMA), with more solid support at the 50-period SMA around $91.20. If silver drops below $90.00, it could trigger selling, with potential downside targets of $85.00-$86.00 or even $80.00. On the other hand, if it breaks above $95.00, it may aim for the psychological target of $100.00. The Relative Strength Index (RSI) is retreating from overbought levels, indicating slowing momentum and a possible consolidation phase. Silver is a valuable asset influenced by geopolitical events, interest rates, and the strength of the US Dollar. Demand from industries and consumers in the US, China, and India also affects silver prices. Typically, silver follows gold’s trends, and the gold/silver ratio can provide insight into their relative values. Recently, silver surged when US-EU trade tensions eased earlier this month. The market is now taking a pause, consolidating near the all-time high of $95.89. This moment of consolidation is a key opportunity for traders to prepare for the next significant price movement. Momentum has cooled, with indicators like the RSI moving away from overbought conditions, suggesting a slowdown in upward movement. This indicates a period of consolidation as the market decides its next course. For derivative traders, this uncertainty creates chances to set up trades for a breakout or a breakdown. The outlook for silver remains positive, driven by industrial demand, which reached a record 654 million ounces in 2025. Recent industry reports suggest that the growth of 5G networks and a global shift toward solar energy will continue to tighten supply this year. This tight supply could make any price dips a potential buying opportunity in the long run. Traders anticipating a rise towards the $100 level might consider buying call options. To minimize upfront costs and define risk, using a bull call spread—buying a $96 call and selling a $100 call—could be a smart strategy. This approach allows for gains from a steady upward move while limiting potential losses if prices fall. However, we should also be mindful of the challenges posed by a strong US Dollar, which has gained strength since the Federal Reserve’s recent hawkish remarks. As a non-yielding asset, silver may lose its appeal if interest rates remain high. This situation could keep prices fluctuating between the support at $90 and resistance close to $95 in the coming weeks. For those who think the rally might be overstretched, buying put options with a strike price below the $90 support could provide a straightforward way to profit from a potential decline. Alternatively, for those expecting sideways movement, selling out-of-the-money call options above $98 could be an effective strategy for collecting premiums. This strategy benefits from time decay if silver does not break its recent highs.

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