Silver fell below $84.00 on Thursday as the US Dollar recovered and profit-taking followed strong US Retail Sales data. XAG/USD was at $83.53 at the time of writing, down more than 4.40%, after failing to move through $90.00.
The drop brought price action towards support near $83.06, the April 17 daily high that has turned into support, after a daily low of $83.27. The Relative Strength Index moved lower but stayed above 50.
For further gains, silver needs to move above $85.00. If it does, levels to watch include $83.65, then $88.44, followed by $89.36 and $90.00.
If XAG/USD falls below $83.06, the next level is the 100-day SMA at $80.84. Further supports sit near $80.00, the 20-day SMA at $77.59, the 50-day SMA at $77.08, and then $70.00.
Silver prices can be affected by the US Dollar, interest rates, geopolitics, recession fears, demand, mining supply and recycling. Industrial use in electronics and solar, and trends in the US, China and India, can also move prices, while silver often tracks gold and the Gold/Silver ratio is used to compare relative value.
Last year around this time, we saw silver pull back sharply below $84.00 after failing to break the $90.00 mark. That profit-taking was driven by a stronger US Dollar and solid economic data back in 2025. Today, the situation is completely different, with silver trading near $31.50 an ounce.
The fundamental backdrop for silver is now incredibly strong due to industrial consumption. The Silver Institute projects a fourth consecutive year of a major market deficit in 2026, with global demand expected to hit 1.2 billion ounces, the second-highest level on record. This is largely driven by a massive expansion in solar panel manufacturing, which now accounts for a significant portion of industrial demand.
We see the Federal Reserve signaling potential interest rate cuts later this year, a major shift from the monetary policy environment we saw in early 2025. Lower interest rates tend to weaken the US Dollar and decrease the opportunity cost of holding non-yielding assets like silver. This creates a supportive environment for prices to move higher.
Considering this outlook, traders could view any dips toward the $30.00 mark as buying opportunities. With volatility expected to increase, buying call options with strike prices around $35.00 for later in the year could be a way to capture potential upside while managing risk. A sustained break above the recent high of $32.50 would be a strong bullish confirmation.
We must also watch the Gold/Silver ratio, which is currently elevated near 85:1. Historically, a ratio this high has often indicated that silver is undervalued compared to gold. This suggests that silver may have more room to run and could outperform gold if precious metals enter a new bull run.
