During Friday's Asian trading session, spot silver (XAG/USD) attracted renewed buying interest after a brief pullback. The price subsequently rebounded swiftly, trading back near the psychologically significant $80 per ounce level. Earlier, silver experienced a technical correction after approaching a near three-week high, but the overall upward structure remains intact, with market sentiment still clearly biased towards the upside.
The broader precious metals market has recently been supported by a weaker US dollar, expectations of Federal Reserve interest rate cuts, and global safe-haven demand. Compared to gold, silver, which possesses both safe-haven attributes and industrial demand characteristics, typically exhibits higher volatility elasticity during periods of improving market risk appetite. This has contributed to its notably expanded gains recently.
Silver's return to the $80 mark indicates that bullish capital continues to dominate short-term price action. Although some profit-taking emerged earlier, the noticeable increase in buying during the pullback suggests the market overall still favors buying on dips.
From a macroeconomic perspective, the market remains highly focused on US Non-Farm Payrolls data and the future path of the Federal Reserve's interest rate policy. If US economic data shows further signs of slowing, market expectations for Fed rate cuts could intensify, potentially weakening the US dollar and supporting precious metal prices.
Concurrently, while tensions in the Middle East have shown temporary easing, global geopolitical risks have not fully subsided. Market analysis suggests that as long as international uncertainties persist, the overall safe-haven demand for precious metals is unlikely to decline significantly.
Furthermore, improving expectations for industrial demand are another key factor driving silver's recent strength. With sustained growth in demand from global new energy, photovoltaic, and electronics manufacturing sectors, the market maintains a relatively optimistic outlook for silver's industrial consumption prospects.
The current logic behind silver's rise has gradually expanded from being purely safe-haven driven to a dual support system of "industrial demand + monetary easing expectations." This is a significant reason why silver's recent gains have been notably stronger than some traditional precious metals.
Looking at the daily chart, XAG/USD has maintained a clear bullish trend recently. The price successfully broke through the 50% Fibonacci retracement level of the March decline and has firmly stabilized above the 100-period moving average, indicating that the medium-term trend has strengthened again.
Regarding technical indicators, the daily MACD continues to operate above the zero line, with the red histogram expanding, suggesting that bullish momentum remains strong. Meanwhile, the RSI indicator is hovering around 68. Although it is approaching overbought territory, no clear bearish divergence signals have emerged, implying that silver still retains room for further short-term gains.
Observing the moving average system, the 5-day, 10-day, and 20-day moving averages have realigned into a bullish formation. The short-term moving averages continue to diverge upwards, providing clear technical support for the silver price. The key $80 level has now transitioned from a previous resistance zone to a short-term support area. Notably, silver is currently approaching the 61.8% Fibonacci retracement resistance zone, which corresponds to approximately $83. Historical experience shows that the 61.8% Fibonacci level is often a critical decision point for medium-term trend direction. If silver can decisively break above the $83 zone, it could open the door for further upside. In such a scenario, the next target for silver could be the 78.6% Fibonacci retracement level near $88.83, or even a retest of the previous high around $96.44. However, given that the RSI is nearing overbought levels, the market also has some short-term technical correction needs. If the US Dollar Index stages a rebound or US jobs data comes in significantly stronger than expected, silver could face periodic profit-taking pressure.
The silver market has currently entered a technically strong phase. After reclaiming the $80 level, bullish sentiment has noticeably strengthened. A weaker US dollar, expectations for Fed rate cuts, and improving industrial demand continue to provide medium to long-term support for silver. From a technical structure perspective, both the daily and 4-hour charts maintain a clearly bullish setup. However, the significant Fibonacci resistance near $83 is likely to determine the next directional move. A successful breakout above this zone could further open silver's upside potential. Nevertheless, with the RSI approaching overbought conditions, investors should remain vigilant about the risks of short-term high-level consolidation and profit-taking.
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