The silver price (XAG/USD) has taken a nosedive, reaching close to $29.60 during a thinly traded session on Friday, in the aftermath of the Christmas and Boxing Day holidays. Despite a significant uptick in geopolitical tensions between Israel and Iran in the Middle East, the white metal has failed to gain traction.
Just the day before, on Thursday, Israel launched a series of missile strikes against the Iran – backed Houthis military and bombed a Yemeni airport. Israeli Prime Minister Benjamin Netanyahu signaled more action was to come, yet this turmoil, which usually bolsters demand for safe – haven assets like silver, has had no such effect this time.
Meanwhile, the US financial landscape is exerting its own influence. The US Dollar Index (DXY), measuring the dollar against six major currencies, is trading within a narrow band above the crucial 108.00 support level. Ten – year US Treasury yields have climbed to approximately 4.61%. These rising yields on interest – bearing assets make non – yielding assets like silver a less attractive option for investors, as the opportunity cost of holding silver has gone up.
The Fed’s expected approach to interest rate cuts in 2025 is also weighing on silver. With the central bank anticipated to slow its policy – easing cycle, thanks to confidence in the US economic outlook, bond yields are staying firm.
Silver Technical Analysis
Silver’s price has dipped below an upward – sloping trendline that started from the February 29 low of $22.30 on a daily chart, after breaking down near $30.00. It’s now hovering around the 200 – day Exponential Moving Average (EMA), painting a picture of an uncertain long – term future.
The 14 – day Relative Strength Index (RSI) has rebounded to around 40.00. If it can’t break above this mark, a new wave of bearish momentum could be unleashed. Looking at potential support and resistance levels, the September low of $27.75 stands as a key floor for silver prices. On the upside, the 50 – day EMA, currently at around $30.90, will act as a significant barrier.
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