Silver Price Holds Negative Bias Below $30.00 Despite Modest Recovery

Silver (XAG/USD) prices edged higher to $29.60 during Monday’s Asian session, recovering some ground on the back of softer-than-expected US inflation data. However, the broader outlook remains bearish as key technical indicators and a cautious Federal Reserve (Fed) monetary policy stance limit the metal’s upside potential.

Technical Analysis Highlights Bearish Outlook

Silver continues to trade below the critical 100-day Exponential Moving Average (EMA), signaling sustained downward momentum. The 14-day Relative Strength Index (RSI) at 39.20 reinforces the bearish sentiment, remaining below the midline and indicating further downside risks.

Support for XAG/USD is seen at the $29.10–$29.00 zone, aligned with the lower Bollinger Band and a key psychological level. A breach of this support could open the door for further losses, with potential targets at $27.70 (September 9 low) and $26.45 (August 8 low).

On the upside, the $30.00 level represents a significant barrier. Sustained trading above this threshold could pave the way for a test of $30.60 (100-day EMA) and further toward $32.17, the upper boundary of the Bollinger Band. However, for now, resistance appears robust at these levels.

Fundamental Factors Driving Silver Prices

Silver’s recovery is supported by softer US Personal Consumption Expenditures (PCE) Price Index data, which showed core inflation rising 2.8% year-over-year in November, below market expectations of 2.9%. This inflation moderation has weakened the US Dollar (USD), offering temporary relief to Silver prices.

Nevertheless, the Fed’s cautious stance on monetary easing in 2025 tempers optimism for the white metal. The central bank signaled a slower pace of rate cuts, supporting elevated US Treasury yields and maintaining downward pressure on yieldless assets like Silver.

Industrial and Investment Demand Considerations

Silver’s dual role as a safe-haven and industrial metal introduces additional price dynamics. Industrial demand, particularly in sectors like electronics and solar energy, remains a key driver. However, broader economic slowdowns in major economies such as China and the US could weigh on demand and limit price gains. Additionally, Silver tends to follow Gold’s moves, and the Gold/Silver ratio suggests Silver may currently be undervalued relative to Gold.

Outlook for Silver Prices

While softer US inflation data provides a near-term boost, the bearish technical setup and cautious Fed policy keep Silver’s outlook tilted to the downside. Investors should monitor key support levels and broader market dynamics for further direction. A sustained move above $30.00 would signal a potential shift in momentum, but for now, the negative bias prevails.