Silver (XAG/USD) is on the rise, hitting a new high around $69.45, thanks to favorable technical conditions. Recently, breaks through key resistance levels have bolstered the positive outlook, with current trading at $69.25, showing a daily increase of 3%. However, the RSI (Relative Strength Index) above 70 indicates it may be overbought, suggesting a possible pause in the uptrend. The 100-hour SMA (Simple Moving Average) at $65.57 acts as crucial support, helping to maintain the upward movement. The MACD (Moving Average Convergence Divergence) at 0.19 indicates rising bullish momentum. If the price pulls back to $65.57, it may find support, but falling below this level could lead to a more significant decline.

Factors Influencing Silver Price

Silver is a popular choice for diversifying investment portfolios and hedging against inflation. Its price is affected by several factors, including geopolitical events, changes in the US Dollar, and investment demand. As an industrial metal, demand from sectors like electronics also plays a role, especially influenced by trends in the US, China, and India. Silver often moves in sync with Gold since both are safe-haven assets. The Gold/Silver ratio provides insights into their relative valuations, and a high ratio may suggest that Silver is undervalued. Looking back at the record high near $69.00 earlier in 2025, we see it reaffirmed a strong long-term uptrend. Since then, silver has experienced a healthy period of consolidation, creating a new scenario to explore. As of December 22, 2025, it’s important to decide whether this sideways movement serves as a foundation for the next upward move.

Industrial Demand and Monetary Policy Impact

Industrial demand remains a key bullish factor as we approach 2026. A recent Silver Institute report anticipates a 9% increase in industrial use next year due to ongoing growth in solar panel manufacturing and 5G infrastructure. This consistent industrial demand helps establish a solid price floor. Nevertheless, we need to consider the current monetary policy landscape. The latest Federal Reserve notes from early December 2025 indicate that interest rates will stay high well into the new year, as November’s CPI data revealed inflation remains above target. Higher rates increase the opportunity cost for holding non-yielding assets like silver. From a relative value standpoint, the gold-to-silver ratio is above 88, which is high compared to historical averages. This suggests that silver may still be considerably undervalued relative to gold. We might see this ratio narrow, implying silver could perform better in the coming weeks. In this context, derivative traders may want to consider strategies that could benefit from a rise in volatility and price. Buying call options with strike prices slightly above the current resistance level allows for participation in a possible breakout with defined risk. For those who lean towards a neutral to bullish strategy, selling cash-secured puts below recent support levels can be an effective way to earn premium while waiting for a more opportune entry point. Create your live VT Markets account and start trading now.

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