Silver prices dropped over 5% due to positive US economic data, which reduced demand for safe-haven assets. XAG/USD currently trades around $80.40, reflecting bearish momentum with pressure increasing below $80.00, aiming for the 50-day SMA at $75.62.
The grey metal’s value fell sharply for the second day, impacted by the strong risk-on sentiment. Silver prices are likely to stabilise between $80 and $85, needing a break above $85.87 to approach $90.00.
RSI metric indicates a bearish outlook, signalling importance of breaking the $80.00 level. If buyers reclaim $90.00, resistance targets could shift to $95.00 and potentially $100.00, as observed in January.
Silver, although less in demand than Gold, is valued for its historic role as a value store and its utilisation in investment diversification. Industrial use, especially in electronics and solar energy, can influence silver prices due to its high electric conductivity.
Silver prices often replicate Gold’s trends as a safe-haven asset. Market and instrument profiles are informational, and due diligence is necessary when making investment choices, acknowledging potential risks and emotional impacts associated with investing in open markets.
Looking back at the sharp sell-off in January 2026, the risk-on mood has only intensified. That slump was triggered by strong economic data, and the latest January jobs report released last Friday confirmed this trend, showing a robust 305,000 new jobs added. This has cemented the market’s view that the Federal Reserve will remain on hold, pressuring safe-haven assets like silver.
The break below the key $80.00 psychological level has confirmed our bearish outlook. We are now trading near $78.50, with the 50-day moving average around $75.62 as the next logical target for sellers. The Relative Strength Index (RSI) remains below 50, indicating that downside momentum is still in control for now.
This strong dollar environment is a major headwind for silver and other precious metals. The US Dollar Index (DXY) has climbed to a three-month high of 105.20, making dollar-denominated assets like silver more expensive for foreign buyers. Until we see a significant weakening in economic data, the path of least resistance for silver appears to be lower.
On the industrial side, recent reports show a slight slowdown in global solar panel manufacturing for the fourth quarter of 2025. This dip, while minor, removes a key pillar of support for physical demand in the near term. We expect this factor to continue weighing on sentiment over the coming weeks.
For derivative traders, this environment suggests buying put options with strikes near $75.00 is a viable strategy to position for further declines. Alternatively, selling out-of-the-money call options with strikes above the December 2025 peak of $85.87 could be an effective way to collect premium. We see limited potential for a significant rally in the immediate future.
We have seen this pattern before, particularly during the 2013-2015 period when strong US economic performance and Fed tightening expectations led to a prolonged slump in precious metals. That historical precedent supports our view that as long as the economic outlook remains bright, silver will likely struggle to find a bid. This is not the time to be fighting the dominant trend.
