Silver Falls to Near $75 as Dollar Strength and Weak Industrial Demand Pressure XAG/USD
XAG/USD plunged to near $75 per ounce at the start of the week as US dollar strength, shifting interest-rate expectations and softer industrial demand combined with technical selling pressure. Institutional selling across Asian and European sessions, mirrored by COMEX futures, drove the move. Key technical signals included a recent death cross (50-day MA below 200-day MA), RSI approaching oversold levels, and a descending triangle on daily charts. Immediate technical support sits at $75, with further floors at $72.50 and $70.00; resistance is around $78.50–$81.00. Fundamental drivers cited were higher real yields, balance-sheet reduction by the Fed, mixed PMI/manufacturing data, and modest increases in mine supply (+2.3% YoY) offset by slightly lower recycling flows. Analysts noted silver’s hybrid role as both an industrial metal and monetary asset; the gold-silver ratio widened as gold held firmer. Sentiment and positioning data showed commercial hedgers adding shorts and managed-money trimming longs. For traders: watch US dollar index moves, Treasury yields, central-bank guidance, manufacturing PMI releases and gold-silver ratio shifts — these factors will likely determine short-term direction, while industrial demand trends and supply fundamentals will influence medium-to-long-term recovery prospects.
Bearish
The article describes a clear confluence of bearish forces: a stronger US dollar, rising real yields and Fed balance-sheet reduction increase opportunity cost for non-yielding assets; softening industrial demand reduces fundamental consumption; institutional selling and bearish technical patterns (death cross, descending triangle, RSI near oversold) add momentum. Historically, similar episodes (e.g., June 2022) saw multi-week weakness before recovery, driven by policy shifts and demand normalization. Short-term impact: elevated downside risk — traders should expect volatility and test of $72.50–$70.00 if dollar/yields remain higher. Options and futures positioning may amplify moves as managed-money trims longs and hedgers add shorts. Medium-to-long term: if industrial demand stabilizes or real yields fall, silver could regain ground, but persistent higher yields and stronger dollar would keep pressure on prices. Monitoring USD index, Treasury yields, PMI data, Fed communications and gold-silver ratio will be decisive for trade decisions.