Silver’s price is approaching the nine-day EMA of $71.54. The 14-day Relative Strength Index (RSI) is at 63.53, indicating positive momentum. The main resistance is around $80.00, which is the upper boundary of the channel. Currently, silver (XAG/USD) has pulled back from a 4.5% gain, trading at about $72.20 in Europe on Wednesday. It’s expected to see more than a 150% annual gain in 2025, which indicates strong performance. Technical analysis shows a bullish trend within an ascending channel. The price is above both the nine-day and 50-day EMAs, supporting a positive outlook. Staying above these averages could lead to resistance at $80.00, and breaking through could reach the record high of $85.87. On the downside, silver may test support at the nine-day EMA of $71.54, followed by the $70.00 channel boundary. A daily close below this channel would signal a correction towards the 50-day EMA at $59.32. Silver is a valuable precious metal due to its historical significance and role in diversifying investment portfolios. Its price responds to geopolitical events, interest rates, and the strength of the US Dollar. Additionally, industrial demand, especially in electronics and solar energy, greatly affects its price, along with economic activity in the US, China, and India. Silver prices often move in relation to gold, and the Gold/Silver ratio offers insights into valuation. Silver recently retraced from its record high of $85.87 and is now testing immediate support. This pause follows an impressive 150% annual gain in 2025, a performance not seen in decades. Traders should view this dip as a possible buying opportunity, given the strong underlying momentum. The primary strategy should be to buy during this weakness, as long as the price stays above the ascending channel support near $70.00. Using call options or bull call spreads can target a return towards the $80.00 resistance level. This strategy aligns with rising inflation, as the November 2025 CPI data came in higher than expected at 4.1%, increasing the demand for hard assets. A daily close below $70.00 would signal a need to reevaluate this bullish view. That could lead to a deeper correction towards the 50-day EMA, currently just below $60.00. In such a scenario, buying put options would be a wise way to hedge or bet on further declines. It’s essential to note that this rally isn’t solely driven by safe-haven demand. The industrial use of silver remains strong, especially following new green energy initiatives in the US and EU in early 2025. Projections from the International Energy Agency in 2024 already indicated a structural deficit, which has intensified this year. Furthermore, silver’s outperformance compared to gold is notable. The Gold/Silver ratio has significantly decreased in 2025, dropping from over 85:1 in January to near 60:1 today. This historic shift indicates that traders are increasingly favoring silver for its dual role as both a monetary and industrial metal in the current economic landscape.

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