Silver trading commenced the week on a positive note, recovering from Friday’s drop from a peak near $64.65. During the Asian session, silver was priced in the mid-$62.00s, marking a 1.25% increase and signalling a potential extension of its upward trend.
Technically, XAG/USD found support at the 100-hour Simple Moving Average, helping it sustain above $62.00, confirming the positive trend. However, with neutral hourly oscillators and a slightly overbought daily RSI, traders should be cautious of hurdles near $63.00. Further strength might see XAG/USD advancing towards $63.80 and potentially beyond $64.00, challenging its peak near $64.65.
Downward Trends And Support Levels
On a downward trend, if silver weakens below $62.00, it could become an opportunity to buy near the 100-hour SMA at $61.45. Breaking below might push prices under $61.00, towards $60.80, the previous low, acting as a critical point that could lead to more losses if breached.
Silver, a precious metal with dual function as both investment and industrial material, experiences price changes due to factors like geopolitical events, interest rates, and US Dollar strength. It is heavily influenced by demand in electronics and solar energy, and typically moves in tandem with gold prices. The Gold/Silver ratio is used by traders to evaluate the relative value between the two metals.
Based on the recent price action, we see that silver has found solid footing near the 100-hour moving average, suggesting that dips are being bought. For derivative traders, this indicates that selling out-of-the-money put options or implementing bull put spreads could be a viable strategy to collect premium while the uptrend remains intact. However, the overbought signal on the daily chart warrants caution, so we should avoid being overly aggressive with long positions at these levels.
Bullish Momentum And Market Sentiment
The fundamental picture supports this bullish momentum, giving us more confidence in the trend. Recent data from the Silver Institute for Q3 2025 confirmed that industrial demand rose by over 7% year-over-year, driven by accelerated solar panel and EV manufacturing. This, combined with the US Dollar Index (DXY) falling below 98 last week following the Federal Reserve’s signal of a pause in its rate-hiking cycle, creates a strong tailwind for dollar-denominated assets like silver.
We can see some parallels between this rally and the speculative fever that drove silver to its then-record high back in 2011, which serves as a reminder of the asset’s volatility. That period was also marked by a weak dollar and concerns about monetary policy. Therefore, while we ride the current trend, using options to define risk is prudent in case of a sharp, unexpected reversal.
Looking at the immediate price targets, any sustained move above the $63.00 mark could be a trigger to add to long positions, possibly targeting the next resistance at $63.80. A failure to hold the $61.45 support level, however, would be our first sign that this leg of the rally is losing steam. A decisive break below this level might signal a deeper correction, making protective puts a consideration for anyone holding long futures contracts.
The Gold/Silver ratio has also compressed significantly, dropping to a 15-year low of 48 last month, which highlights silver’s recent outperformance. While this reflects strong momentum, it also suggests that silver may be getting expensive relative to gold. Some of us might consider setting up pairs trades, anticipating a reversion where gold begins to outperform silver, should the ratio find a bottom.
