Silver fell for a third day, dropping over 2.90% on Friday to $80.16 and heading for nearly 3% weekly losses. The move came as the US Dollar traded near a four-month high and US Treasury yields rose.
US equities gained 0.40% to 0.43% while data pointed to weaker growth after a 43-day government shutdown. The second estimate of Q4 2025 GDP slowed from 1.4% YoY to 0.7%.
Dollar Strength Drives Silver Lower
Core PCE inflation held at 3.1% YoY in January, while headline inflation eased from 2.9% to 2.8%. Expected Fed easing priced for 2026 rose from 17 basis points to at least 19.5 basis points.
WTI Oil reached a yearly high near $113.00 earlier in the week and later traded at $95.90. Petrol prices rose more than 20% to $3.60 per gallon since the conflict began two weeks ago.
The US Dollar Index rose 0.61% to 100.35, and the 10-year Treasury yield increased 2.5 basis points to 4.287%. President Donald Trump announced action against Iran after a partial 30-day waiver for buying sanctioned Russian Oil.
Technical levels cited include resistance near $83.00 and $86.00, with support around $78.00 and $74.00, and a further level near $70.00. An RSI reading was described as moving towards 45.
Key Near Term Risk Events
The US Dollar’s strength is currently overwhelming other factors, pushing silver below the key $81 mark. With the Dollar Index hitting a four-month high of 100.35, we see direct pressure on dollar-priced assets like silver. This trend is likely to continue in the immediate short-term as long as US Treasury yields remain elevated near 4.30%.
We are now focused on next week’s Federal Reserve meeting on March 17-18, which will be a major catalyst. While the weak GDP data from late 2025 supports the case for rate cuts, sticky inflation at 3.1% gives the Fed reason to pause. We remember how in early 2024, markets priced in aggressive cuts that didn’t materialize until later in the year, causing a sharp repricing in metals, so caution is advised.
Geopolitical risks from the Middle East and President Trump’s planned actions against Iran are a significant wildcard for inflation. Oil prices, after briefly touching $113, have settled around $95.90, but any escalation could send them surging again, forcing the Fed’s hand and potentially boosting silver’s safe-haven appeal.
From a technical standpoint, the bearish momentum seems poised to test the $80 level. A break below this psychological support could open the door to a slide towards the next support at $78, making put options with strikes in this range an interesting consideration. We would need to see a firm close back above $86 to reconsider a bullish stance.
The Gold/Silver ratio is also providing clues, now stretching above 85:1, a level not seen since the economic uncertainty of 2024. This suggests silver is becoming historically cheap compared to gold. For those of us with a longer-term view, this divergence could present an opportunity for pairs trades, betting on silver to outperform gold if market sentiment shifts.
