Silver slipped almost 1% in Monday’s North American session after touching $78.20. With US markets closed, thin trading and broad US Dollar strength pushed prices below the 50-day SMA at $79.45.
A bearish engulfing candle earlier drove silver down from around $83.70 toward $75.00. Over the last two sessions, XAG/USD has stayed in a $75.00–$80.00 range.
Momentum Remains Bearish
The RSI is below the neutral line, which suggests sellers are still in control. Even so, price has not clearly broken below $75.00.
A drop under $75.00 could open the way to $70.00, then the February 6 swing low at $64.10. On the upside, a break above $80.00 would shift attention to the February 12 high at $84.94 and the February 11 peak at $86.30, with the 20-day SMA at $89.99 after that.
Silver is a precious metal. Traders can hold it physically or gain exposure through products like ETFs. Prices are shaped by the US Dollar, interest rates, demand, mining supply, recycling, and overall risk sentiment.
Because silver is used in electronics and solar panels, industrial demand ties its price to economic activity in the US, China, and India. Silver often moves with gold, and traders use the gold/silver ratio as a valuation tool.
Market Context And Trade Setup
Silver is showing a familiar pattern, similar to last year’s price action. A strong US Dollar—after pushing the Dollar Index (DXY) toward 104.5 this month—continues to weigh on the metal. This setup looks like what we saw in 2025, when a bearish engulfing candle kept silver trapped in a tight range.
The main level to watch is still $75.00. Sellers could not break this support cleanly last year. With the RSI again pointing to weak momentum, derivatives traders may consider put options if price closes clearly below this level. A break could quickly bring a retest of lower targets seen in 2025, such as $70.00.
The pressure is not only technical. Fundamentals also matter. The January 2026 Consumer Price Index came in hotter than expected at 3.3%. That has pushed back expectations for rate cuts. Higher-for-longer rates tend to support the dollar, which can reduce demand for non-yielding assets like silver.
If buyers can push price back above the $80.00 resistance, bearish trades should be reviewed. A sustained move above $80.00 could signal a shift in sentiment. In that case, call options or bull call spreads may make sense. Upside targets would include the February 2025 highs near $84.94.
Industrial demand also looks weak. The latest global manufacturing PMI readings for January 2026 are just below the 50 level that separates contraction from expansion. Still, the gold/silver ratio has widened to above 92:1, which has often suggested silver is cheap versus gold. This may offer a longer-term opportunity for pairs traders who expect the ratio to move back toward its historical average.
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