Silver (XAG/USD) is slightly down, trading around $35.75, which is a decrease of about 0.46%. This drop comes as safe-haven demand falls due to positive geopolitical developments, like the Iran-Israel truce. Recently, silver reached multi-year highs near $37.00. Technical indicators show that silver’s upward trend might be slowing. A bearish divergence is present between silver’s price and the Relative Strength Index (RSI), currently around 56. This suggests that the bullish momentum is fading. The price is testing the support of an upward channel near $35.71. If it closes below this level, it could indicate a change in bullish momentum. This may lead to a potential drop to $34.00 if the lower support fails. Bollinger Bands are narrowing, which suggests a major price movement could be ahead. Additionally, the Average True Range (ATR 14) is down to 0.78, meaning volatility is reduced, indicating a possible market consolidation phase. The overall trend for silver remains upward unless there is a clear reversal. Economic factors like geopolitical stability, interest rates, and currency values continue to influence silver’s movements. Its industrial uses and its role as an alternative to gold also play a part in market dynamics, alongside supply and demand from main economies. What we’ve seen recently in silver markets is typical cooling off after a strong climb. The metal surged to prices not seen in years, touching almost $37.00 before retreating. This level became a psychological barrier, leading traders to reassess their positions, especially with easing tensions in the Middle East. The divergence with the RSI at 56—still in a positive range—indicates that while buyers are still present, their enthusiasm is diminishing. The important point is not just the RSI value but its decline despite higher prices. This pattern can suggest that buyers are raising the price with less strength, often leading to a drop or stagnation. Currently, the market is just above technical support at the lower edge of an upward channel. If the price convincingly breaks below this support and stays there, we can expect traders to look at downside targets, with $34.00 as the next likely stop. Watching the trading volume during sharp price moves will add context to the strength or weakness at these levels. Volatility measures are also revealing trends. The Bollinger Bands are tightening, and the ATR is down to 0.78. This indicates we might enter a quieter period, where prices may move sideways before a major breakout. In terms of volatility, breakouts usually follow these conditions, though the timing is unclear. While technicals are crucial for making decisions, external factors can’t be ignored. Macroeconomic indicators, especially those related to interest rates and the strength of the dollar, need close monitoring. Any changes from central banks or significant currency fluctuations could directly impact metal prices. We also need to keep in mind silver’s dual role as both an industrial material and a financial asset. This makes it sensitive not only to policy and market sentiment but also to data like global factory activity and purchasing trends. A rise in demand from tech and solar sectors or changes in inventory reports may influence price expectations. For now, caution is advised. The risk is slightly tilted upwards in the medium term, unless there’s clear bearish confirmation. We should stay vigilant for technical breakdowns that come with a loss of momentum and regularly reassess risk-reward scenarios as the market develops. It is during these calmer periods that potential opportunities begin to emerge.

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