Silver opens the week with strong momentum, driven by several forces acting at the same time. Safe haven demand is rising amid geopolitical tensions, the macro backdrop is reinforcing expectations of lower US interest rates, and supply remains tight against solid industrial demand.
Because silver sits at the intersection of precious and industrial metals, it tends to respond faster than most assets when market risk sentiment shifts.
1. Interest Rates, US Dollar, and Risk Perception Are Moving in the Same Direction
Last week’s US December added to signs that the labor market is cooling. Non-agricultural employment rose by just 50,000, while the slipped to 4.4%, highlighting softer growth beneath the headline numbers.
The data strengthened market expectations of an earlier interest rate cut by the . As rate cut pricing increased and the US dollar weakened, demand picked up for non-yielding assets such as silver, providing fresh support to prices.
Meanwhile, the judicial scrutiny surrounding Jerome Powell and rising tensions between the Federal Reserve and the administration have added further pressure on the US dollar. Growing political and institutional uncertainty has pushed investors toward safe havens, a shift that often drives sharper price moves not only in gold but also in silver, which tends to react with greater volatility.
2. Safe Haven Demand Back in the Spotlight
Uncertainty across the Middle East and global politics continues to underpin safe haven demand in commodity markets. Escalating protests in Iran and renewed tensions between Tehran and the United States have been key drivers pushing investors toward gold and silver.
Recent actions by Donald Trump’s administration involving Venezuela and Iran, including plans around Venezuelan oil flows and fresh sanctions threats, have added another layer of uncertainty. Against this backdrop, silver’s move back above $80 an ounce highlighted how quickly shifts in risk sentiment feed through to prices. Ongoing geopolitical risk from the Russia-Ukraine war and the conflict in Gaza has further reinforced the environment supporting continued demand for safe haven assets.
3. Industrial Demand and Supply Constraints
Explaining silver’s rise purely through macro and geopolitical headlines misses a large part of the story. Industrial demand for silver is expected to reach record levels in 2025 and stay strong in 2026. Around 58% of global silver demand now comes from industrial use, with fast-growing demand from solar panels, electric vehicles, electronics, and AI-related hardware.
This shift is turning silver into a more strategic commodity and helps explain why prices tend to move faster and with greater volatility when risk appetite or commodity exposure increases.
On the supply side, conditions remain tight. Only about 27% of silver output comes from primary silver mines, with the rest produced as a byproduct of copper, lead, zinc, and gold mining. This limits the industry’s ability to respond quickly to higher demand. After several years of supply deficits between 2021 and 2024, total supply in 2025 is estimated at roughly 813 million ounces against demand of around 1.24 billion ounces.
Inventories in London, China, and the United States have fallen to low levels, reinforcing the tight market backdrop. China’s new export licensing system, which took effect on January 1, has added further strain by making shipments more difficult, especially for smaller producers. At the same time, silver’s inclusion on the US critical minerals list and steady physical buying in China and India continue to strengthen underlying demand.
Silver’s Technical Outlook
On the daily chart, silver spent much of last week moving sideways within the $74.66 to $83.36 range while keeping its broader uptrend intact. This consolidation above the rising trend curve suggests a pause rather than a breakdown. Strong buying interest from the $74 area late in the week, followed by a fresh attempt at new highs at the start of this week, indicates that short-term control has shifted back to buyers.
From a technical standpoint, the $83.36 level stands out as the key threshold. A clear break above this area, followed by sustained trading above it, would signal that the previous high has turned from resistance into support. As long as prices remain above $83.36, any pullbacks are likely to reflect profit taking rather than a change in trend, keeping the upside bias intact.
In this scenario, silver could accelerate toward the Fibonacci extension zone, with $87, $88.76, and $91.28 acting as successive upside targets. Holding above $91 would strengthen the technical base for a move toward the psychological $100 level, with the next expansion target near $103.63 if momentum persists.
Momentum indicators also support this view. The Stochastic RSI has been moving sideways near oversold territory, which raises the likelihood of an upside signal if price holds above $83.36. The moving average structure remains constructive, with short-term exponential moving averages trending higher and price staying above the 8-day EMA at 78.56 and the 21-day EMA at 73.20, reinforcing the prevailing upward trend.
On the downside, daily closes below $83 would raise the risk of a move below the short-term rising trend. In that case, the first level to watch would be 78.56, which aligns with the 8-day EMA. Below that, the 74.50 to 74.66 zone becomes critical, as it marks both the base of the recent consolidation and a key Fibonacci retracement area.
A clear break of this support band would open the door to a deeper correction toward 69.28 and potentially 64.93. That said, if the broader fundamental backdrop remains supportive, including rate cut expectations, a weaker dollar, elevated geopolitical risk, and ongoing supply constraints, pullbacks are likely to attract buying interest around the $75 area.
Overall, fundamentals continue to favor silver, but from a technical perspective, holding above 83.36 remains the key condition for confirming the uptrend. As long as this level holds, the path remains open for a gradual extension higher.
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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belong to the investor. We also do not provide any investment advisory services.
