Silver is currently trading at around $114, which is an increase of about 1.80% for the day. This rise is due to the growing demand for safe-haven assets and a weakening US Dollar. Political tensions in Washington and comments from US President Trump, who appears to be comfortable with a weaker Dollar, are also contributing factors. Political uncertainty in the US is pushing investors towards Silver as a way to protect against instability. The Federal Reserve is set to hold a policy meeting soon, with interest rates expected to stay between 3.50% and 3.75%. Speculation about ongoing supportive monetary policies may further affect the US Dollar and Silver prices. Unresolved international conflicts are increasing demand for precious metals like Silver. Despite price increases, short-term factors such as a softer US Dollar and political issues continue to provide support. While profit-taking may happen, it hasn’t stopped Silver’s upward trend. Investors are drawn to Silver for its historical value and its role as a hedge during inflation. Various factors influence its price, such as industrial demand, global economic conditions, and the Gold/Silver ratio. Typically, Silver prices trend alongside Gold, with investors often using the Gold/Silver ratio for valuation purposes. After reaching high prices late last year, Silver has recently pulled back. Traders are now facing a more complex situation. The strong rally to $114 was fueled by a weaker dollar and political tensions, but market conditions are shifting. Silver is currently consolidating around $108, indicating that the market is taking a pause to assess the situation and look for the next move. In the new year, the US Dollar has found some stability, with the Dollar Index (DXY) rising back towards 101 after dropping below 98 in late 2025. This recovery is linked to a more complicated outlook from the Federal Reserve, as the latest Consumer Price Index (CPI) report showed inflation at 3.1%, slightly higher than expected. As a result, the strong belief in a prolonged accommodative monetary policy is being reconsidered, which could limit Silver’s price increases for now. For derivative traders, this suggests that implied volatility may rise in the upcoming weeks. Options strategies designed to profit from significant price changes—regardless of direction—might be beneficial. Given this uncertainty, traders with long futures positions from last year may want to consider buying puts to protect against a possible drop toward the $100 psychological barrier. On a positive note, the strong industrial demand for Silver remains a key support factor. Global installations of solar capacity, a major source of Silver use, increased over 35% in 2025, and we expect this trend to continue this year. This creates a solid fundamental support level that may limit how much prices can fall. We are also monitoring the Gold/Silver ratio, which hit a multi-year low of about 35:1 during the significant rally in 2025. It has since increased closer to 40:1, making Silver seem relatively cheaper compared to Gold. Traders focusing on this ratio might see the current level as an appealing entry point for long Silver positions against short Gold positions. The demand for Silver as a safe-haven asset, which drove last year’s buying, is still present. Ongoing international tensions continue to be a concern in 2026. This environment encourages investors to keep precious metals as a vital part of their portfolios. Therefore, any major price dip is likely to attract new buying interest from those looking to protect themselves from continuous risks.

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