Silver rose from three-week lows near $72.00 on Wednesday but stayed below $74.00. It was near $73.10 at the time of writing.
The US Dollar was firm as markets awaited the US Federal Reserve decision due later on Wednesday. The Fed was widely expected to keep interest rates unchanged.
Fed Leadership And Geopolitical Risks
Jerome Powell faced a choice on whether to remain on the Board of Governors or leave, after a request from US President Donald Trump. TD Securities said silver could fall further if Middle East war conditions hurt growth and raise carry costs.
XAG/USD traded near $73.00 and stayed in a bearish trend from mid-April highs above $83.00. Support was near the 50% Fibonacci retracement of the March–April rally at about $72.00.
On the 4-hour chart, the RSI stayed below 50 and the MACD histogram stayed below zero. For upside, price would need to clear $74.00 and last week’s $76.70–$77.00 zone to target $80.00.
A break below the $72.12 Fibonacci level could open $69.50 (61.8% retracement) and the April 7 low near $68.30. The technical section was produced with help from an AI tool.
Last Years Backdrop And What Changed
Looking back at the analysis from this time last year, we saw silver struggling below $74.00 amid uncertainty over the Fed’s path. That period in mid-2025 was defined by a hawkish stance and questions around central bank leadership. The subsequent pivot to an easing cycle late last year completely changed the landscape for precious metals.
The concerns in 2025 about a weak economy hurting industrial demand have not materialized as feared. In fact, the latest Silver Institute data projects a 5% rise in industrial consumption for 2026, largely driven by the ongoing expansion in solar and EV manufacturing. This strong underlying bid suggests that call options or bull call spreads could be viable strategies to capture further upside.
We are now in a starkly different interest rate environment than the one anticipated in early 2025. With the March 2026 CPI data coming in at a manageable 2.8%, markets are now pricing in a greater than 75% probability of another rate cut in June. This falling cost of carry is a significant tailwind, making long positions in silver futures more attractive than they have been in over two years.
Despite the bullish fundamental picture, implied volatility remains elevated, creating opportunities for option sellers. With silver now consolidating above $85.00, selling out-of-the-money puts can be a way to generate income and potentially acquire a long position at a lower price. This strategy allows us to capitalize on the positive trend while acknowledging that sharp pullbacks can still occur.
