Silver (XAG/USD) experienced a slight decline during the Asian session, trading below the mid-$47.00s, down 0.20% for the day. Despite this, it remains above recent lows and attracts buyers near the $48.00 mark.

Technically, silver is bouncing off the 50-day EMA, indicating bullish sentiment. However, negative traction on daily chart oscillators suggests caution is needed before confirming a reversal from the recent decline.

The $47.00-$46.95 range supports immediate downside, with potential slides below $46.00 possibly testing the 50-day EMA around $45.55 and extending to $45.00 or lower. A convincing move above $48.00 could trigger further gains toward $49.00 and beyond.

Silver prices are influenced by factors such as geopolitical instability, interest rates, and USD behaviour since it is priced in dollars (XAG/USD). Industrial demand in electronics and solar sectors affects prices, while it also often mirrors Gold’s movements due to their similar status as safe-haven assets.

For diversification or during high-inflation periods, some investors prefer silver over gold. Although abundant, like Gold, factors such as mining supply and demand drive its valuation in global markets.

We are seeing silver struggle to push past the $48.00 mark, suggesting a lack of strong conviction from buyers at this level. The price action is currently confined between key technical points, creating uncertainty for short-term direction. This indecisive trading warrants a cautious approach in the coming weeks.

The US Dollar’s recent strength is a primary headwind for silver prices. Following the Federal Reserve’s statement on October 29th, 2025, which signaled a continued data-dependent approach but held rates steady, the US Dollar Index climbed to a three-week high of 107.50. A stronger dollar makes dollar-denominated assets like silver more expensive for holders of other currencies.

Industrial demand, a key driver for silver, is also showing mixed signals. China’s latest manufacturing PMI, released just yesterday, registered at 49.8, indicating a slight contraction and raising concerns about demand for silver in electronics and solar panels. We saw a similar slowdown back in late 2023 which preceded a temporary dip in silver prices before industrial buying resumed.

From a relative value perspective, the Gold/Silver ratio has expanded to 88:1, its widest point since the second quarter of 2025. This suggests that silver is relatively cheap compared to gold, a factor that could attract buyers if market sentiment improves. For now, however, gold’s safe-haven appeal is clearly dominating.

For traders anticipating a breakdown, a decisive move below the immediate $47.00 support level could be a signal to buy put options or initiate short futures positions. The next major downside targets would be the $46.00 mark and the 50-day moving average, which currently sits near $45.55. Such a move would confirm that the recent corrective phase from the all-time high has further to run.

Conversely, a sustained break above the strong resistance zone of $48.50 would invalidate the bearish outlook. In this scenario, purchasing call options or long futures contracts would be a viable strategy, targeting a move towards the $49.00 and then the psychological $50.00 level. This would require a significant catalyst, such as a sharp downturn in the US Dollar.

Given the upcoming European Central Bank policy decision next week, we are seeing an increase in implied volatility in the options market. Traders who are unsure of direction but expect a significant price swing could consider strategies like a long straddle. This involves buying both a call and a put option with the same strike price and expiration date to profit from a large move in either direction.