Silver (XAG/USD) extended its fall on Tuesday, reaching a two-week low of $73.35. Markets are watching major central banks, which are due to announce policy decisions this week.
The Middle East conflict has added to global energy costs and raised inflation pressure. This can lead central banks to keep policy tight or lift rates, which can weigh on non-yielding metals.
Central Banks Drive Silver Direction
The US-Iran situation remains unresolved and the Strait of Hormuz is closed. Crude prices are nearly 50% above pre-war levels, supporting the US Dollar and adding pressure to precious metals.
Technically, silver remains in a downtrend from mid-April highs above $83.00. On the 4-hour chart, RSI is near 35 and MACD is slightly negative.
Support at the 38.2% Fibonacci level near $74.70 has been broken. Price targets sit between $72.60 and $72.12, with the 61.8% retracement just below $70.00.
Resistance is expected at $74.70, then around $76.60 and near $78.50. Silver prices can also be influenced by interest rates, the US Dollar, supply and recycling, industrial demand, and moves in gold.
Trading Implications For Silver Bulls And Bears
We recall the bearish trend that began in mid-2025 when silver broke down from highs above $83.00. That pressure continues today, April 28, 2026, as the market remains fixated on the actions of major central banks rather than geopolitical flare-ups. The key takeaway for traders is that monetary policy is firmly in the driver’s seat.
The primary headwind for silver is the persistent fight against inflation, which has forced central banks to maintain a hawkish stance. With the latest US CPI data for March 2026 coming in at a stubborn 3.8%, the Federal Reserve has signaled interest rates will remain elevated for longer than previously expected. This environment makes holding a non-yielding asset like silver fundamentally unattractive for large investors.
This policy has directly fueled a surge in the US Dollar, with the Dollar Index (DXY) recently hitting a two-year high of 107.50. A strong dollar makes silver more expensive for holders of other currencies, which naturally weighs on physical and investment demand. We have seen this inverse relationship play out consistently over the past 12 months.
Furthermore, signs of a global economic slowdown are becoming more apparent, which could weaken the industrial demand component for silver. The latest S&P Global Manufacturing PMI reading dipped to 49.5, indicating a slight contraction in factory activity and suggesting softer demand from key sectors like electronics and solar energy. This removes a significant pillar of support that silver has relied on in previous years.
For derivative traders, this suggests that any strength in silver prices is likely to be short-lived and should be viewed as a selling opportunity. The key resistance zone to watch is the $70.00 to $72.60 area, which acted as support during the 2025 decline and now represents a significant technical ceiling. We believe initiating short positions or buying puts on rallies towards this level could be a prudent strategy in the coming weeks, with a downside target near the psychological $60.00 mark.
