Silver rose on Thursday and moved above $80.00, reaching a three-week high. Price action pointed towards the April 20 area at $80.50-$80.70.
Lower US Treasury yields and falling oil prices supported precious metals, alongside a weaker US Dollar in a risk-on mood. Reports of progress in the US-Iran peace process and rumours of talks to reopen the Strait of Hormuz helped push crude lower, easing expectations of Fed rate rises.
Technical Momentum Builds
Silver was up about 10% over the last two days. The move followed a rebound from weekly lows, with a higher low near $72.25 and a bullish engulfing daily candle on Wednesday.
Indicators suggested stretched momentum, with the 4-hour RSI near 80 and the MACD histogram positive and rising. Resistance was seen near $80.70, with the next level just above $83.00.
Support was noted around $76.70, with the weekly low near $72.15. “Risk-on” describes periods when markets favour riskier assets, while “risk-off” describes shifts towards safer holdings.
In risk-on phases, stocks, most commodities, and currencies such as AUD, CAD, NZD, RUB, and ZAR often rise. In risk-off phases, bonds, gold, and currencies such as USD, JPY, and CHF tend to strengthen.
Options Strategy Considerations
With silver pushing past the $80.00 mark, we are seeing strong bullish momentum, but technical indicators are flashing warning signs. The Relative Strength Index (RSI) is approaching 80, a level that often signals a market is overbought and due for a pause or pullback. This suggests that while the trend is up, the risk of a sharp reversal is increasing daily.
Given these overstretched conditions, we should look at options strategies that can profit from either continued momentum or a short-term correction. The CBOE Silver Volatility Index (VXSLV) is currently elevated near 34, indicating that the market expects significant price swings in the near future. This reminds us of similar rallies in past years that were often followed by swift consolidations.
Fundamentally, the rally is supported by falling US 10-year Treasury yields, which are now below 4.1%, making non-yielding assets like silver more attractive. Furthermore, the CME FedWatch tool is indicating a nearly 70% probability of a Fed rate cut by the third quarter, which could fuel further gains toward the $83.00 resistance level. Therefore, buying call options on any significant dip could prove to be a valuable strategy.
We must also consider the broader economic picture, which mirrors the risk-on sentiment described. Last year, in 2025, we saw a continued physical silver deficit for the fourth year in a row, driven by record industrial demand from the solar and automotive sectors. This underlying supply-demand imbalance provides a strong fundamental floor for the price, suggesting any major downside correction might be limited.
Considering the conflicting signals, a flexible approach is necessary for the coming weeks. We believe using bull call spreads, perhaps buying an $81 strike and selling an $83 strike, allows for participation in further upside while limiting the upfront cost. To protect existing long positions, traders should consider buying protective puts with a strike price near the initial $76.70 support level.
