Silver (XAG/USD) fell after four days of gains and traded near $88.20 per troy ounce in early European trading on Tuesday. On the daily chart, the 14-day Relative Strength Index (RSI) was 54 and remained above the midline.
Price stayed above the nine-day Exponential Moving Average (EMA) and the 50-day EMA. The 50-day EMA was rising, and the nine-day EMA could act as support during pullbacks.
Trend And Momentum Outlook
Both EMAs were sloping upwards, with the nine-day EMA above the 50-day EMA. This setup may allow price to move towards the record high of $121.66, set on 29 January.
Support levels were the nine-day EMA at $83.03 and the 50-day EMA at $80.15. If price breaks below both, it could open the way to the two-month low of $64.08, posted on 6 February.
The technical analysis for the story was produced with help from an AI tool.
With silver holding firm around the $88.20 mark, the technical setup suggests a modest bullish bias is still in play. We see the price remaining above key moving averages, which points to underlying strength in the current trend. For traders, this indicates that pullbacks are likely to be viewed as buying opportunities rather than the start of a reversal.
Options And Risk Management
Given the upward sloping EMAs, we should consider strategies that benefit from a potential move towards the recent record high of $121.66. Buying call options with strike prices around $95 or $100 could offer leveraged exposure to this upside momentum. This view is supported by the latest Global Solar Council report, which projects a 15% year-over-year increase in silver demand for photovoltaic manufacturing in 2026.
Alternatively, for those of us who believe the key support levels will hold, selling cash-secured puts below the market could be an attractive option. Selling puts with a strike price near the 50-day EMA around $80 would allow traders to collect premium, banking on the idea that the floor will not fall out of this market. We saw a similar consolidation in Q3 2025, where silver held the $75 level firmly before industrial buying drove the next major rally.
The broader economic picture also supports holding a bullish view, as the latest CPI data came in at 3.5%, keeping inflation concerns front and center for investors. This makes silver, as a hard asset, an appealing hedge against declining purchasing power. Furthermore, markets are now pricing in a 60% probability of a Federal Reserve interest rate cut by June, which would likely pressure the US Dollar and provide another tailwind for the metal.
However, we must remain disciplined and watch the key support levels at $83.03 and $80.15 closely. A decisive break below the 50-day EMA would signal a significant shift in momentum and invalidate the bullish thesis. In such a scenario, buying put options or initiating short futures positions would be the appropriate response to target a move back towards the $64.08 low seen earlier this month.
