Silver (XAG/USD) rose 0.69% on Tuesday to $73.22, after rebounding from a daily low of $72.41. Price remains below $75, with $80.00 still out of reach.
Silver is held down by the 20-day SMA at $75.94, the 50-day SMA at $77.77, and the 100-day SMA at $79.52. These levels sit below the $80.00 area.
The RSI is still bearish, though it is moving back towards the 50 level. This points to weaker selling pressure even as downtrend conditions persist.
A close near $72.40 could open the way to further losses. Support levels mentioned are $70.86 and $70.00, with the 200-day SMA at $62.52 also noted.
Silver prices can be influenced by interest-rate moves, US Dollar strength, geopolitical risk, and recession concerns. Other drivers include demand, mining supply, and recycling.
Industrial use in electronics and solar can affect prices, and shifts in the US, Chinese, and Indian economies may add volatility. Silver often tracks Gold, and the Gold/Silver ratio is used to compare relative pricing.
Looking back at this time in 2025, we remember the bearish sentiment when silver was struggling to stay above $72. The metal was stuck below all its key moving averages, signaling to sellers that they were in control. The main resistance back then was the 20-day SMA near $75.94, a level that seemed distant.
The situation today, on May 6, 2026, is markedly different. Silver has broken through those old resistance levels and is currently trading around $85.50, driven by persistent inflation fears after last week’s April CPI report came in at 3.9%, higher than the expected 3.7%. This has reignited interest in silver as an inflation hedge, a characteristic that was less of a focus last year.
Industrial demand also provides a strong tailwind that was absent in 2025. A recent report from the Electric Vehicle Consortium showed a 15% year-over-year increase in silver consumption for battery and component manufacturing. This fundamental demand, particularly from the clean energy sector, creates a solid floor under the price.
Given this bullish momentum, we are seeing derivative traders position for further upside. Buying call options with strike prices around $90 for July and August 2026 expirations appears to be a popular strategy to capture a potential move towards the $100 psychological barrier. This is a significant shift from the defensive posture we held last year.
However, we must remain aware of the risks from potential US Dollar strength. To manage this, traders are also buying protective puts with a strike near the $82 support level. This provides a hedge in case of a sudden market shift or a more aggressive stance from the Federal Reserve in their next meeting.
