Silver prices dipped to $58.49 after rising from a low of $57.54. This comes as the Federal Reserve is expected to cut rates next week. Although the US Dollar is weakening, a slight divergence in the RSI hints at a possible pullback, targeting the $53.80–$54.00 support zone and the 50-day SMA at $50.25. If silver rises above $59.00, it could approach $60.00 and set new all-time highs. Still, the overall uptrend is strong, with bullish momentum continuing. Since silver is traded in dollars, changes in the US Dollar affect its price. Many choose silver for portfolio diversification as it’s a precious metal. Several factors influence silver prices, including geopolitical events, interest rates, USD strength, investment demand, mining supply, and recycling rates. In industry, silver is vital because of its high electrical conductivity, especially in electronics and solar energy. Price increases often coincide with rising industrial demand in major economies like the US, China, and India. Silver typically follows gold’s price movements, with the Gold/Silver ratio showing the relative valuation of both metals. The silver uptrend is intact, but we may see a pullback as we enter the second week of December 2025. The divergence in the RSI suggests that bullish momentum could be fading, offering a chance for a corrective move. With silver at $58.49, traders should be cautious about chasing new highs before the Federal Reserve’s interest rate announcement next week. For those expecting the uptrend to persist, a break above $59.00 would signal a target of $60.00, marking new all-time highs. The CME FedWatch Tool indicates over a 90% chance of a 25-basis-point cut next week, making buying call options with a strike price at or above $59.00 a smart strategy. This would take advantage of the anticipated price surge following a dovish Fed announcement. However, the risk of a sharp correction is real, making put options a valuable hedge or speculative choice. If silver is rejected at the $59.00 resistance, prices could fall towards the first major support zone around $54.00. We remember how silver corrected more than 30% in just a few weeks after its 2011 peak, showing how quickly parabolic moves can reverse. The upcoming Fed meeting will likely boost implied volatility, raising options premiums. This environment may be right for volatility-based strategies, such as a long straddle, which could benefit from large price swings in either direction after the announcement. It might be wise to wait for the market to process the Fed’s decision before making a directional trade. Beyond short-term market trends, the fundamental outlook for silver is strong, particularly due to industrial demand. Recent reports from the Silver Institute noted that consumption in the solar panel and electric vehicle sectors hit a record in 2025, taking in over 30% of the total annual supply. This solid demand creates a good price base for the long term. With gold priced above $4,200, the Gold/Silver ratio is around 72, slightly above the 21st-century average. This suggests silver is not significantly overvalued compared to gold and still has potential for growth if precious metals remain favorable. Therefore, any significant drop towards the 50-day moving average at $50.25 could be seen as a long-term buying opportunity.

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