Silver (XAG/USD) rose on Tuesday after earlier losses, supported by ongoing geopolitical and economic risks. It traded near $87.80 after rebounding from a daily low of $84.96, while a firmer US Dollar limited further gains.
Silver has gained nearly 23% over the last four trading days and reached its highest level in almost three weeks on Monday. The move followed a corrective drop from the late-January record high near $121.66.
The daily chart points to a mildly bullish near-term bias. Price has moved back above the rising 50-day Simple Moving Average (SMA) and remains above the 100-day SMA, both clustered in the low-to-mid $80s.
The Relative Strength Index (RSI) has stabilised just above 50 after recovering from mid-range levels. This suggests improving momentum without entering overbought territory.
Average True Range (ATR) has eased from recent peaks, which points to lower volatility. Price action may shift towards steadier moves rather than sharp swings.
Support sits near the 38.2% Fibonacci retracement at $86.05, based on the $64.08 low and the $121.66 high. Below that, the 23.6% retracement at $77.64 is the next support.
Resistance is near the 50% retracement at $92.85, with a further level at the 61.8% retracement at $99.65. The technical analysis was produced with help from an AI tool.
We are seeing silver regain its footing around the $87.80 mark, bouncing strongly after a brief dip. This follows an impressive 23% rally over the last four trading days. The market seems to be absorbing the sharp pullback from the record highs near $121.66 seen just last month in January.
This renewed interest is happening as key economic data points to persistent inflation. The latest CPI report for January 2026 showed inflation holding at 3.5%, reinforcing the idea that central banks may pause on further rate hikes. This environment makes non-yielding assets like silver more attractive.
From a technical standpoint, the price has climbed back above its 50-day moving average, a sign of returning strength. With volatility easing, as shown by the ATR indicator, the conditions are becoming favorable for a more sustained trend. We saw a similar pattern in the third quarter of 2025, where a sharp sell-off was followed by a steady recovery fueled by dip-buyers.
Given this backdrop, buying call options with strike prices just above the $92.85 resistance level could be a prudent strategy. This allows traders to capitalize on potential upward momentum while defining their maximum risk. The stabilizing RSI, which is not yet in overbought territory, suggests there is still room for the price to run higher.
It is crucial to watch the $86.05 support level closely. A decisive break below this price would signal that the bullish momentum is fading. Such a move might prompt traders to hedge their positions with puts or exit their long calls to limit losses.
Further strengthening our bullish view, the latest Commitment of Traders report shows that large speculators and hedge funds have increased their net long positions for the second week in a row. Additionally, industrial demand for silver is projected to grow by 4% in 2026, driven by ongoing investments in solar panel and electric vehicle manufacturing.
