Silver prices have reached a 14-year high, currently trading around $38.60 after hitting $39.13. This rise is due to increased demand for precious metals amid growing trade tensions and geopolitical uncertainties. The recent increase in tariffs by the U.S. on the European Union and Mexico has raised fears of bigger trade conflicts. As a result, many investors are turning to assets like silver for safety. Silver is being closely watched, especially with the upcoming U.S. Consumer Price Index data, which could influence Federal Reserve rate expectations and silver’s short-term direction. Right now, silver is in a strong upward trend that began in April after breaking past the $37.00-$37.30 resistance zone. This trend is supported by technical indicators showing buyers are in control, with the price above the 9-day EMA at $37.36. However, the RSI at 73.15 hints at potential limits to immediate gains. If silver stays above $38.50, it may reach the $40.00 level, while support is around $37.30. The industrial demand for silver is significant, especially in electronics and solar energy, due to its conductivity. This demand can lead to price changes based on global economic activity. Given the current situation, we view silver as poised for growth, and our strategy must be both bold and tactical. Staying above the critical $37.30 support is more than a technical sign; it’s a fundamental indicator. We need to look past merely the headlines of trade disputes. For instance, the U.S. has recently increased tariffs on Chinese electric vehicles and solar cells, serving as a major catalyst. According to the Silver Institute, industrial demand for silver is expected to rise by 9% this year, reaching a record 690 million ounces, with photovoltaic demand alone projected to climb 20% to 232 million ounces. This represents a direct demand surge that futures traders should consider. Therefore, our main approach in the futures market is to keep and expand our long positions. Many share this viewpoint. The latest Commitment of Traders report shows that managed money funds have increased their net-long positions, aligning with us on price growth. Although the RSI suggests overbought conditions, we see this as a reason to carefully manage risk rather than sell. History reminds us that in 2011, silver surged to $50 before a sharp drop, which influences our strategy. This is where options become a crucial part of our toolkit. For those looking to take advantage of the anticipated rise toward the critical $40 level, we recommend bull call spreads. This involves buying a call option just above the current price while selling another with a strike price close to or slightly above $40. This strategy helps manage risk and targets specific profit areas, allowing us to benefit from upward movement without being overly exposed to sudden reversals, like we saw over a decade ago. For portfolios with strong long positions in futures, protection is key. We are purchasing out-of-the-money put options with strikes centered around the $37.30 support. Think of this as affordable insurance. If U.S. inflation data comes in higher than expected and raises concerns about a hawkish Federal Reserve, these puts will protect our profits from quick declines. We are not anticipating a drop, but we are preparing for the likely volatility that comes with these multi-year highs. Our goal is to ride the wave of strong industrial and geopolitical trends upward while using options to create a safety net against market fluctuations.

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