Silver fell nearly 8% on Friday, reversing earlier weekly gains as higher US Treasury yields and a firmer US Dollar weighed on bullion. XAG\/USD was trading near $76.65, close to its lowest level in more than a week. <\/p>\n
Recent US data showed stronger-than-expected inflation and steady consumer spending, lifting expectations of a possible Federal Reserve rate rise later this year. Higher oil prices linked to Middle East disruptions were also cited as adding to inflation pressure. <\/p>\n
The CME FedWatch Tool shows markets expect rates to stay unchanged in the coming months, with about a 42% chance of a hike in December. Higher rates can reduce demand for non-yielding assets such as silver. <\/p>\n
On the daily chart, price is below the 50-day SMA at $76.99 and the 100-day SMA at $81.28, while the 200-day SMA sits at $65.04. The RSI (14) is 47.37 and the MACD is about 0.66, with momentum easing. <\/p>\n
Resistance is at $76.99, then $81.28, while support is near $65.04. Silver prices can also be influenced by the US Dollar, industrial demand, mining supply, recycling, and moves in gold. <\/p>\n
We remember the sharp 8% drop in silver prices back in 2025, which was driven by fears of a hawkish Federal Reserve. Strong economic data at that time led many to believe a rate hike was coming, which strengthened the dollar and hit non-yielding metals hard. That period serves as a key lesson in how quickly sentiment can punish silver prices. <\/p>\n
The situation today, in mid-May 2026, appears to be the opposite of what we saw last year. The latest Consumer Price Index report for April 2026 showed inflation has cooled to 2.9%, moving closer to the Fed’s target and easing pressure for rate hikes. As a result, the CME FedWatch Tool now indicates a nearly 70% probability that the Fed will begin cutting rates by its September meeting. <\/p>\n
This shifting monetary policy outlook should be seen as a tailwind for silver, potentially weakening the U.S. dollar and increasing the appeal of precious metals. Industrial demand also remains a powerful factor, with global solar panel installations forecast to grow by over 15% this year, consuming millions of ounces of silver. Considering this backdrop, we should be positioning for potential upside rather than expecting a repeat of the 2025 sell-off. <\/p>\n
For derivative traders, this suggests a move away from the bearish stances that were profitable last year. Buying call options to capture upward price movement or selling cash-secured puts at levels we believe will hold as support are strategies that align with the current fundamental picture. Volatility is still a risk, so using options allows for defined risk on these bullish bets. <\/p>\n
Technically, the price action supports this view, unlike the setup in 2025 when silver was breaking down. We are currently seeing XAG\/USD consolidate above its 50-day moving average, which is now acting as support around the $30.50 level. The Relative Strength Index is holding at a healthy 62, suggesting that bullish momentum is building without being overextended.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Silver slid nearly 8% as rising Treasury yields and stronger dollar boosted Fed hike expectations, pressuring bullion.<\/p>\n","protected":false},"author":103,"featured_media":16981,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[6],"class_list":["post-53450","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates","tag-gold"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/53450","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/103"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=53450"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/53450\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16981"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=53450"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=53450"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=53450"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}