Silver prices have skyrocketed, with XAG/USD exceeding $93.00, nearing its all-time high of $93.90. This jump is due to risk-averse sentiment after President Trump announced new tariffs on major European countries. Trump’s decision includes a 10% tax on products from eight EU nations due to their opposition to the US annexation of Greenland. This announcement has prompted Eurozone leaders to push for a strong response, raising tensions among Western nations. Technical analysis shows XAG/USD currently trading at $93.12, indicating a bullish trend. The MACD is close to signaling a bullish crossover, and the RSI at 61 reflects strong momentum. Resistance is found at $93.90, with a potential target of $99.25 based on Fibonacci levels. Support is at the lows of January 15 and 16 around $85.45, followed by the highs of January 7 and the low of January 13 near $83.00. The US Dollar showed mixed results against major currencies, dropping 0.22% against the Euro and 0.13% against the Japanese Yen. The Swiss Franc, however, gained strength against the Dollar, rising by 0.51%. With silver surpassing $93.00, bullish strategies take center stage due to rising trade tensions between the US and EU. A similar trend occurred during the early tariff disputes in 2025 when precious metals rallied for weeks. The CBOE Volatility Index (VIX) has also jumped over 20% in the last five trading days, indicating high market fear and a flight to safe-haven assets. Derivative traders might look into buying call options to benefit from further price increases while managing risk. Given the potential target of $99.25, call options with a $95.00 strike for February or March expiration present a solid opportunity. Implied volatility for these options has risen above 40%, a level not seen in six months, suggesting the market expects a significant price shift. To protect against a sudden drop from these near-record highs, buying put options as a hedge is wise. The $85.45 level provides strong support, making puts with an $85.00 strike an economical way to safeguard long positions or bet on a pullback. Historically, after sharp increases like the one in spring 2025, silver prices have corrected by 10-15% shortly after. In the broader market, the US Dollar is weakening against commodity currencies, which typically boosts metal prices. This situation further supports a long position in silver, as a declining dollar makes it cheaper for foreign holders. Open interest in silver futures contracts has also risen by 12% over the past week, suggesting new investment is flowing into the bullish side of this trade.

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