Silver prices are on the rise, hitting $99.00 during the Asian session on Friday. A recent breakout from an upward trend starting at $86.67 suggests more potential for price increases, although current overbought conditions urge caution.

Technical Indicators

The Moving Average Convergence Divergence (MACD) shows increasing positive momentum. The 200-period Simple Moving Average (SMA), set at $91.47, supports a bullish outlook. However, the Relative Strength Index (RSI) is at 76.98, indicating possible limits on immediate gains. If the price stays above $97.22, it could go higher; but if it drops below that, we risk falling back into the channel. Silver is a prized asset, both historically and for diversifying portfolios. It can be purchased physically or through Exchange Traded Funds. Prices are influenced by geopolitical events, interest rates, and the performance of the US Dollar. Industrial demand, especially from sectors like electronics and solar energy, is also important, with major influences from the US, China, and India. Silver prices usually move in tandem with gold, as both are considered safe-haven assets. The Gold/Silver ratio can offer insights into their relative values, helping identify when one may be undervalued or overvalued. With silver reaching $99.00, the strong upward momentum remains. The sustained break above $97.22 signals that buyers are firmly in control. This rise is backed by interest rate cuts from the Federal Reserve during the second half of 2025, which have caused the US Dollar Index (DXY) to fall to a multi-year low of 94.50. However, with the RSI now over 76, the market is in overbought territory, suggesting a possible pause or pullback soon. Traders should be cautious before entering new long positions at this point. A smart approach would be to use options to manage risk, like buying call spreads to enjoy potential gains while keeping costs down.

Strategies and Market Dynamics

The fundamentals continue to support silver’s industrial demand. In 2025, global solar panel installations soared by over 35%, outpacing expectations and indicating a significant supply deficit in the physical market. This rise in industrial use alongside safe-haven buying reinforces support around previous resistance levels. Due to the rapid price increase, implied volatility is high, making long options costly. Traders might consider selling out-of-the-money put options with strike prices close to the 200-period moving average support level at $91.47. This strategy allows traders to gather significant premiums while positioning themselves bullishly at a better price if a decline occurs. It’s also worth mentioning the historic drop in the Gold/Silver ratio, which has plummeted to nearly 35 from an average of 80 in 2024. This shows that silver is outperforming gold significantly, largely due to its industrial use rather than its role as money. This trend suggests that any dips in silver are likely to prompt stronger buying than similar declines in gold. Create your live VT Markets account and start trading now.

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