Silver (XAG/USD) maintained its recovery move around $74 during the Asian trading session on Friday, following a rebound from the February low near $64.00 on Thursday [1]. The recovery was driven by a sharp decline in the US Dollar Index (DXY), which fell over 1% to near 99.00 on Thursday before rising slightly to 99.35 [1]. This decline in the US Dollar made silver an attractive risk-reward trade for investors [1].
Global central banks, including the Bank of Japan (BoJ), Bank of England (BoE), and European Central Bank (ECB), signaled that they are unlikely to ease monetary policy conditions due to de-anchoring inflation expectations caused by higher oil prices [1]. On Wednesday, the US Dollar rallied after the Federal Reserve's monetary policy outcome, with Chairman Jerome Powell indicating that interest rate cuts are not feasible unless inflation resumes progress toward the Fed's 2% target [1]. The prospect of extended tight monetary conditions is theoretically unfavorable for non-yielding assets like silver [1].
Geopolitical conflicts in the Middle East involving the US, Israel, and Iran are expected to continue supporting safe-haven assets such as silver, limiting downside risk in the current environment [1].
From a technical perspective, XAG/USD trades slightly higher at around $74, but the near-term bias remains bearish. The price has extended its decline below the 20-day Exponential Moving Average (EMA), which acts as dynamic resistance near $81.30. The sequence of lower closes from the mid-$90s to the low-$70s highlights persistent selling pressure, and the RSI slipping below 40.00 for the first time in 11 months confirms downside momentum without reaching oversold territory [1]. Immediate resistance is at $76.50, with a stronger barrier at $81.00, while initial support is at $70 and Thursday's low of $65.51 [1].
CONCLUSION
Silver's recovery to $74 is supported by recent US Dollar weakness and ongoing geopolitical tensions, but the overall outlook remains bearish due to persistent selling pressure and tight global monetary conditions. Technical indicators suggest sellers remain in control unless the price can reclaim key resistance levels. Investors should monitor central bank policy signals and geopolitical developments for further direction.