Silver remains stable above $64.00, having peaked at $64.62. The US Dollar continues to weaken, which helps keep precious metals strong. Silver has now risen for four straight days, staying steady above $64.00. The US Dollar Index is close to two-month lows, and expectations for monetary policy have not changed. The silver rally might be too much too fast, as technical indicators show an RSI of 75 on the 4-hour chart. Silver is struggling to consolidate further, facing resistance around $65.00, with future targets set at $68.17. Key support levels are $62.80 and $61.44, with further support near $59.85. These levels are crucial for those monitoring price movements. Silver is a popular investment because of its historical value and its ability to diversify portfolios. Its price is affected by geopolitical events, interest rates, and the performance of the US Dollar. Demand for silver in industries like electronics and solar energy influences its price. Economic conditions in the US, China, and India also play a role. Silver prices often move in sync with gold. Changes in the Gold/Silver ratio can reveal their relative value, affecting their positions in the market. On December 12, 2025, silver is holding above $64.00 after hitting an all-time high. This rise is largely due to a weak US Dollar, which has dropped on expectations of significant Federal Reserve rate cuts in the coming year. For derivatives traders, this creates high tension between strong upward momentum and signs of fatigue. The current technical indicators may caution against buying call options at these prices. The Relative Strength Index (RSI) indicates overbought conditions at 75, along with a bearish divergence, signaling that this rally might be losing steam. Although the trend remains upward, a 25% gain in just three weeks raises the likelihood of a sharp pullback. Therefore, strategies like buying puts or setting up bear put spreads to hedge long positions are worth considering. Fundamentally, the case for silver is still strong enough to cushion any potential decline. Industrial demand has been robust, especially in the photovoltaic and 5G sectors, which have consistently outpaced supply. Data from the Silver Institute in 2024 indicated record industrial usage, and demand from the green energy transition has only intensified since. Monetary policy plays a crucial role in supporting silver prices. Like late 2023, markets are pricing in Fed rate cuts aggressively, with the CME FedWatch Tool suggesting over a 90% chance of a cut by the second quarter of 2026. This sustained pressure on the dollar and real yields creates a tailwind for non-yielding assets like precious metals. We should also consider historical price trends, as this isn’t the first time silver has surged. In 2011, silver nearly reached $50 an ounce before experiencing a significant drop in subsequent years. While the fundamentals differ now, past price history reminds us that rapid increases can be followed by swift declines. Thus, traders in the coming weeks should focus on managing volatility rather than making outright directional bets. Strategies like vertical spreads can help define risk, while straddles or strangles might be used to take advantage of potential volatility spikes, regardless of direction. Key support to monitor is the $60.00 level; a drop below this could indicate the start of a larger correction.

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