Silver prices rose to near $49.20 during the European session on Thursday, rebounding from bids near $48.00. This rise is due to renewed trade tensions between the United States and China, increasing demand for safe-haven assets like Silver.

The White House is considering export restrictions on software-powered products to China, following Beijing’s curbs on rare earth minerals. US Treasury Secretary is set to meet Chinese Vice Premier this week, and the focus remains on the upcoming US Consumer Price Index data for September.

Interest in the Federal Reserve’s monetary policy is high as traders expect a rate cut in the upcoming meeting. Lower rates are favourable for non-yielding assets like Silver, but prices have pulled back from an all-time high of $54.85 last week.

Silver remains under its 20-day Exponential Moving Average at around $49.01, with the Relative Strength Index falling below 60.00. A key support level is at $44.47, with $54.50 acting as a significant barrier on the upside.

Silver, traded among investors, serves as a store of value and a medium of exchange. Prices are influenced by geopolitical instability, US Dollar strength, interest rates, and supply-demand dynamics, including industrial demand and the Gold/Silver ratio.

We are seeing silver find its footing near $49.20 after a dip to the $48.00 level, driven by escalating trade tensions between the US and China. Fears over potential US export restrictions on software-powered products are stoking demand for safe-haven assets. This geopolitical friction is a key factor supporting the price, especially after China’s previous curbs on rare earth minerals, which we saw drop by 15% in US imports last quarter.

The market is overwhelmingly anticipating a Federal Reserve interest rate cut next week, which is a significant tailwind for silver. This expectation is solidified by the deteriorating job market conditions, with the recent non-farm payrolls report for September showing a disappointing addition of only 85,000 jobs, pushing unemployment to 4.3%. Lower interest rates reduce the opportunity cost of holding non-yielding assets like silver, making it more attractive.

Despite these bullish fundamentals, the technical picture shows some weakness after last week’s all-time high near $54.85. The price is currently struggling to stay above its 20-day moving average, a sign of lost momentum. The RSI indicator has also dipped below 60, suggesting the recent powerful uptrend has paused for now.

For derivative traders, this creates a landscape ripe with opportunity for volatility plays. With strong support identified at the September 23 high of $44.47 and major resistance at the recent peak, options strategies like straddles could be considered ahead of next week’s Fed meeting. These levels provide clear boundaries for setting strike prices for puts and calls.

Underneath the daily price movements, the fundamental demand from industry remains a strong supporting factor. Global solar panel installations are on track to exceed 500 gigawatts in 2025, a notable increase from the installation rates we saw back in 2024. This consistent industrial consumption provides a solid baseline of demand for the white metal, independent of investment flows.

We also need to watch the gold/silver ratio, which is currently sitting around 82:1. Historically, this is on the higher side, which some traders interpret as a signal that silver may be undervalued relative to gold. This could suggest potential for silver to outperform gold if precious metals catch a broader bid in the coming weeks.