Silver prices have surged, with XAG/USD reaching above $93.00, close to the all-time high of $93.90. This rise is driven by a risk-averse sentiment following President Trump’s announcement of additional tariffs affecting major European countries.
Trump’s decision includes 10% levies on eight EU countries in response to their stance against the US annexation of Greenland. This announcement has led to calls from Eurozone leaders for a strong reaction, marking a rise in tensions among Western nations.
Technical analysis indicates XAG/USD is trading at $93.12, with indicators showing a bullish trend. The MACD is nearing a bullish crossover, and the RSI at 61 suggests strong momentum.
Resistance stands at $93.90, with a projected target at $99.25 based on the Fibonacci extension. Support lies at the January 15 and 16 lows, around $85.45, followed by the January 7 highs and January 13 low near $83.00.
The US Dollar experienced mixed performance against major currencies, decreasing 0.22% against the Euro and 0.13% against the Japanese Yen. Meanwhile, the Swiss Franc was notably strong against the Dollar, increasing by 0.51%.
With silver pushing past $93.00, the immediate focus is on bullish strategies due to the escalating trade tensions between the US and EU. We saw a similar flight to safety during the early stages of the tariff disputes in 2025, where precious metals saw a sustained rally for several weeks. The CBOE Volatility Index (VIX) has already jumped over 20% in the last five trading days, signaling that market fear is high and traders are actively seeking safe-haven assets.
Derivative traders should consider buying call options to capitalize on further upward momentum while defining their risk. Given the technical target of $99.25, call options with a $95.00 strike for February or March expiration offer a direct play on this bullish trend. Implied volatility for these contracts has surged to over 40%, a level not seen in the past six months, indicating that the market is pricing in a significant price swing.
To manage the risk of a sharp reversal from these near-record highs, purchasing put options as a hedge is a prudent move. The $85.45 level serves as a strong support area, making puts with an $85.00 strike a cost-effective way to protect long positions or speculate on a pullback. Historically, after such rapid ascents like the one we saw in spring 2025, silver prices have experienced corrections of 10-15% within a short period.
The broader market shows a weakening US Dollar against commodity currencies, which typically supports metal prices. This environment strengthens the case for being long silver, as a declining dollar makes it cheaper for holders of other currencies. We can also observe that open interest in silver futures contracts has increased by 12% over the last week, confirming that new money is flowing into the bullish side of the trade.
