Silver prices have decreased, reaching two-week lows at $47.33, influenced by a positive market mood. Reports of a potential China-US trade deal contribute to the pessimistic view on precious metals, driving XAG/USD down from mid-October highs above $54.00 towards the $47.00 level.

US President Trump’s comments about reaching a favourable agreement with China have added negative pressure on traditional safe-havens like Silver. The technical analysis shows a bearish Head & Shoulders pattern targeting $46.00, with the price action below the neckline at the $50.71 area.

The $46.00 area remains a probable support level, before the next target at the 76.2% Fibonacci retracement near $44.00. Resistance might be encountered at $49.40 and above $51, ahead of October highs at $52.75.

Silver serves as a store of value and a hedge during inflation, although less prominent than Gold. Factors such as geopolitical events or a strong US Dollar can influence Silver prices. Its industrial demand, particularly in electronics and solar energy, also affects prices. Silver tends to mirror Gold’s price movements, with the Gold/Silver ratio offering insight into their relative valuation.

Looking back, the bearish sentiment driven by hopes of a Sino-US trade deal pushed silver down to the $47.30 level. That period’s technical analysis correctly pointed towards a target near $46.00, a level that provided significant support before the trend reversed. Now, in late October 2025, the market dynamics have shifted considerably from that risk-on environment.

The positive market mood seen back then has been replaced by caution amid renewed global supply chain concerns and geopolitical friction. This uncertainty is increasing the appeal of safe-haven assets, providing a solid floor for silver prices. We are no longer seeing the kind of optimism that weighed on precious metals during that earlier trade-deal-focused era.

Fundamentally, industrial demand for silver is much stronger now than it was. Recent 2025 manufacturing reports show global solar panel production is up nearly 25% year-over-year, which directly increases silver consumption. This robust industrial use case provides a bullish tailwind that was less of a focus when markets were fixated on trade headlines.

Furthermore, the interest rate environment has changed in our favor. With major central banks signaling a peak in their tightening cycles, the opportunity cost of holding a non-yielding asset like silver is decreasing. A weaker US Dollar, which has recently fallen below 104 on the DXY index, is also making silver cheaper for foreign buyers and supporting its price.

The Gold/Silver ratio currently stands at a high of 87:1, which is well above the historical average we have observed for much of the last decade. This suggests that silver is undervalued relative to gold and has significant room to catch up. This valuation gap presents a compelling argument for silver to outperform gold in the near future.

Therefore, we should view any price dips as opportunities to build long positions in the coming weeks. Traders could consider using pullbacks toward the $49.50 support level to buy call options or bull call spreads. This strategy would allow us to capitalize on the positive fundamental backdrop while defining our risk.