Insights 
VT 
The silver price (XAG/USD) fell to around $47.90 per troy ounce in early trading after hitting a 14-year high of $48.77. The 14-day Relative Strength Index is above 70, indicating potential for a downward correction, with initial support at the nine-day EMA of $47.00.
Trades above the nine-day Exponential Moving Average show short-term momentum, although the overbought RSI suggests caution. The next target for the silver price could be the $48.00 mark, with potential upward tests towards $49.40 and possibly even $50.00.
Potential Downward Trend
If prices drop below the nine-day EMA of $47.00, it could diminish momentum, driving the price towards the lower boundary of the ascending channel at $44.10. A further decline could put pressure on the silver price, potentially reaching the 50-day EMA of $42.13.
Silver usage in industry, US Dollar behaviour, and global economic conditions influence its pricing. Silver is valued as an industrial metal and safe-haven asset, often following gold price trends. Factors such as geopolitical events, interest rates, and industrial demand affect silver’s fluctuating value.
Silver has pulled back after hitting a 14-year high of $48.77, now trading near $47.90 on October 7, 2025. Although the price remains in a bullish ascending channel, we are seeing signs of it being overbought. This suggests a short-term correction could be on the horizon before any further move up.
For traders anticipating a bounce, the move back towards the psychological $48.00 level could be a near-term play. We would consider buying call options with a strike price of $48.50, expiring in late October, to capitalize on a potential retest of the recent highs. A break above $48.77 would open the door to target the $49.40 upper channel boundary.
Strategic Considerations
However, with the 14-day RSI above 70, caution is warranted as this indicates overbought conditions. To hedge against a potential drop, we could buy puts with a strike price near the $47.00 support level. This provides protection if the short-term momentum falters and the price begins to correct.
Industrial demand remains a powerful tailwind, building on the momentum we saw throughout 2024. Global solar panel installations in 2024 surpassed 440 GW, and 2025’s numbers are on track to exceed that, increasing silver’s consumption. This fundamental strength supports the case for buying on any significant dips.
The macroeconomic picture is also favorable, as the US Dollar has softened following the Federal Reserve’s signals last month that rate hikes are likely finished for this cycle. Looking back at the aggressive rate hikes of 2023 and 2024, this shift toward a more dovish policy makes holding non-yielding assets like silver more appealing. A weaker dollar generally acts as a catalyst for higher silver prices.
We are also watching the Gold/Silver ratio, which has tightened to 74:1 from the 82:1 level seen earlier this year. While this shows silver has been outperforming gold, it also suggests the metal may be getting expensive on a relative basis. This reinforces the idea that a short-term pullback is possible before the next major leg up.
If the nine-day EMA at $47.00 fails to hold as support, it would be a bearish signal. A break below this level could trigger a sharper decline towards the ascending channel’s lower boundary around $44.10. In such a scenario, traders might initiate bear put spreads to profit from the downward move.
