Silver’s value dropped dramatically, falling over 30% with a loss of more than $38. It quickly plunged below important levels of $100, $90, and $80. The Relative Strength Index shows a move toward bearish momentum. Currently, Silver is trading at $76.91, down from a high of $118.46. If it falls below $70, it could drop further. The 50-day Simple Moving Average (SMA) at $73.51 acts as a support level, while the 100-day SMA at $60 represents a possible lower target. People buy Silver for its intrinsic value, as a hedge against inflation, and to diversify their portfolios. Although less popular than Gold, Silver remains an important part of many investment strategies. Several factors can influence Silver prices, including geopolitical events, recession fears, and changes in interest rates. Its connection to the US Dollar and supply dynamics also affects its value in the market. Industrial demand plays a significant role in Silver’s pricing because it is used in electronics and solar power. Economic activities in the US, China, and India can cause price shifts based on both industrial and consumer needs. Silver prices often follow Gold’s trends since both are viewed as safe-haven assets. The Gold/Silver ratio indicates their relative market valuation. We cannot forget the dramatic drop in late 2025, when Silver plummeted from over $118 to below $80 in a single session. This event drastically changed market dynamics and created the trading landscape we have today. The rapid decline, breaking multiple major support levels, shows that extreme volatility is now a normal part of this market. The aftermath of that crash keeps implied volatility very high. The Cboe Silver ETF Volatility Index (VIXSLV) is around 45%, much higher than the 28% average for most of 2025. This makes buying options costly and risky. For derivative traders, this environment favors strategies that benefit from high premiums, like selling covered calls or setting up credit spreads far out-of-the-money. On the positive side, strong industrial demand may provide a price floor. The International Energy Agency’s final Q4 2025 report confirmed a 15% year-over-year increase in global solar panel installations, a major use of Silver. This demand suggests another collapse like that of 2025 is unlikely unless there’s a major global slowdown. However, we’re also facing challenges from central bank policies. Minutes from the Federal Reserve’s December 2025 meeting indicated a continued hawkish stance, which supports the US Dollar. A strong dollar makes Silver pricier for foreign buyers and reduces the appeal of non-yielding assets. The gold/silver ratio, which skyrocketed to 95:1 during the downturn, has since stabilized around 88:1. This remains historically high and suggests some may view Silver as undervalued compared to Gold. We should monitor this ratio for any signs of a breakdown, which could hint at renewed strength for Silver. Given these conditions, there are opportunities to sell put options with strike prices below key technical levels, such as the $70 mark mentioned during the crash. This strategy allows us to collect high premiums while managing risk at a level we believe is backed by strong industrial demand. If Silver drops below the 100-day SMA, currently around $62, we would need to reassess this optimistic outlook.

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