Silver fell for a third day, dropping over 2.90% on Friday to $80.16 and heading for nearly 3% weekly losses. The move came as the US Dollar traded near a four-month high and US Treasury yields rose. US equities gained 0.40% to 0.43% while data pointed to weaker growth after a 43-day government shutdown. The second estimate of Q4 2025 GDP slowed from 1.4% YoY to 0.7%.

Dollar Strength Drives Silver Lower

Core PCE inflation held at 3.1% YoY in January, while headline inflation eased from 2.9% to 2.8%. Expected Fed easing priced for 2026 rose from 17 basis points to at least 19.5 basis points. WTI Oil reached a yearly high near $113.00 earlier in the week and later traded at $95.90. Petrol prices rose more than 20% to $3.60 per gallon since the conflict began two weeks ago. The US Dollar Index rose 0.61% to 100.35, and the 10-year Treasury yield increased 2.5 basis points to 4.287%. President Donald Trump announced action against Iran after a partial 30-day waiver for buying sanctioned Russian Oil. Technical levels cited include resistance near $83.00 and $86.00, with support around $78.00 and $74.00, and a further level near $70.00. An RSI reading was described as moving towards 45.

Key Near Term Risk Events

The US Dollar’s strength is currently overwhelming other factors, pushing silver below the key $81 mark. With the Dollar Index hitting a four-month high of 100.35, we see direct pressure on dollar-priced assets like silver. This trend is likely to continue in the immediate short-term as long as US Treasury yields remain elevated near 4.30%. We are now focused on next week’s Federal Reserve meeting on March 17-18, which will be a major catalyst. While the weak GDP data from late 2025 supports the case for rate cuts, sticky inflation at 3.1% gives the Fed reason to pause. We remember how in early 2024, markets priced in aggressive cuts that didn’t materialize until later in the year, causing a sharp repricing in metals, so caution is advised. Geopolitical risks from the Middle East and President Trump’s planned actions against Iran are a significant wildcard for inflation. Oil prices, after briefly touching $113, have settled around $95.90, but any escalation could send them surging again, forcing the Fed’s hand and potentially boosting silver’s safe-haven appeal. From a technical standpoint, the bearish momentum seems poised to test the $80 level. A break below this psychological support could open the door to a slide towards the next support at $78, making put options with strikes in this range an interesting consideration. We would need to see a firm close back above $86 to reconsider a bullish stance. The Gold/Silver ratio is also providing clues, now stretching above 85:1, a level not seen since the economic uncertainty of 2024. This suggests silver is becoming historically cheap compared to gold. For those of us with a longer-term view, this divergence could present an opportunity for pairs trades, betting on silver to outperform gold if market sentiment shifts. Create your live VT Markets account and start trading now.

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