Silver prices halted their two-day decline during the Asian trading session on Wednesday, rebounding to around $75.70 per ounce. This recovery was primarily driven by improved market risk sentiment and a concurrent drop in energy prices. As signs of a temporary easing of tensions in the Middle East emerged, crude oil prices faced downward pressure, leading to a cooling of inflation expectations. This, in turn, reduced market bets on central banks maintaining persistently tight monetary policies.
The United States announced an end to offensive operations in relevant areas and reaffirmed that ceasefire arrangements remain in effect. However, the US Department of Defense indicated that the situation is not yet fully stable, with localized conflicts still occurring.
Against the backdrop of moderating inflation expectations, market anticipation for sustained high-interest rates has weakened, providing support for non-yielding assets like silver. Previously, soaring energy prices had driven inflation higher, leading to widespread expectations that central banks might maintain a high-interest-rate environment for an extended period, which consistently pressured silver. The recent pullback in oil prices has prompted a temporary reassessment of this outlook.
The decline in energy prices has become a significant factor propelling silver's rebound, as it directly influences the path of inflation and interest rate expectations, thereby altering the valuation logic for precious metals.
Nevertheless, silver's upward movement faces clear constraints. The situation in the Middle East is not entirely stable, and markets remain highly vigilant about the potential for renewed conflict. The US stated it would pause certain actions to assess the possibility of reaching agreements, but restrictions on key shipping channels persist, making it difficult for geopolitical risk premiums to dissipate completely.
From a market structure perspective, silver had been under sustained pressure, primarily due to the dual impact of high inflation and high interest rate expectations. The current rebound appears more related to sentiment recovery and technical short-covering than a fundamental trend reversal. Short-term covering of positions at lower levels is contributing to a phase of price correction.
Technically, on the daily chart, silver remains in a phase of corrective consolidation following its pullback from higher levels. After consecutive declines, the price has stabilized above $74, forming a short-term supportive structure for a rebound. Key resistance levels are observed near $76.00 and the $77.50 area; a break above could potentially extend gains towards $79. Support levels are situated at $74.00 and the $72.50 region. The RSI indicator has recovered from oversold territory to a neutral zone, indicating strengthening short-term corrective momentum, but the overall trend has not yet reversed. The MACD remains below the zero line, suggesting medium-term downward pressure persists.
On the 4-hour chart, silver shows a structure of rebounding from lower levels within a range. Short-term moving averages have begun to turn upward, signaling increased rebound momentum. The price gradually moving above the short-term moving average system suggests that buying interest is returning. The MACD shows preliminary signs of a golden cross, albeit weak, indicating the move is predominantly corrective. The RSI oscillates around the 50 level, reflecting a market still in a state of balance between bullish and bearish forces. A break above the $76 resistance could lead to a test of the $77.50 area, while a fall below $74 might signal the end of the current rebound structure.
Silver's current trajectory is influenced by two core factors: firstly, the easing of Middle East tensions leading to lower energy prices, which alleviates inflation pressure; and secondly, a cooling of market expectations for continued central bank policy tightening, driving a short-term rebound in precious metals. Inflation expectations and geopolitical risks remain key variables determining silver's medium-term direction. If energy prices continue to decline, silver may extend its corrective phase; however, a renewed escalation of conflict or a rebound in inflation could lead to renewed downward pressure. Overall, silver remains in a phase of high volatility and consolidation, with a clear trend yet to be established.
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