Silver prices edged higher on Monday, rebounding from their 50-day moving average for the third consecutive session. While technicals offer some short-term support, the overall backdrop remains fragile due to growing concerns about industrial demand and global trade pressures.



Gold continues to rise on expectations of a Fed rate cut, so why isn't silver following suit?

Gold prices surged last week, driven by weak US non-farm payroll data, which heightened expectations of a September Federal Reserve rate cut. With only 73,000 new jobs added in July and June's figure revised downward to 14,000, the probability of a rate cut jumped to 78%, according to the CME FedWatch tool. Gold prices surged as US Treasury yields plummeted and the US dollar index fell 1.2%.

In contrast, while gold rose 0.77%, silver fell 2.99% last week to close at $37.02. The gold-to-silver ratio widened significantly, highlighting silver's failure to keep up with currency buying of gold. This divergence suggests that traders are hesitant to consider silver as a safe-haven asset amid rising global industrial pressures.

Weak demand and trade tariffs limit silver's appeal

Ongoing concerns about industrial activity remain a key headwind for silver, with global manufacturing data weighing on the outlook for silver demand. Additional pressure comes from new U.S. tariffs, including a 15% tariff on South Korean goods and a 50% tariff on Brazilian imports, which disrupt supply chains and amplify downside risks for industrial metals.

This macro backdrop has weakened silver's historical correlation with gold. While gold draws support from expectations of monetary easing, silver has increasingly been linked to indicators pointing to economic contraction.

Technical analysis: Rally continues, but resistance limits momentum


(Source of spot silver daily chart: Yihuitong)

Silver is attempting to reclaim lost ground after holding above its 50-day moving average ($36.60) for the third consecutive session. Given the recent range between $39.53 and $36.21, the 50% retracement level implies a short-term upside target of $37.87.

However, there remains strong resistance at $38.34 and $38.51. On the downside, key supports lie at $36.21, $36.16, and $35.28. A break below these levels could trigger stop-loss selling.

Silver Outlook: Volatility possible ahead of CPI data, with yields and the dollar in focus

With the Consumer Price Index (CPI) report still a week away, traders will likely focus on short-term signals from U.S. Treasury yields and the U.S. dollar. Given silver’s recent divergence from gold, any significant moves in either could trigger rapid two-way moves in silver.

Until industrial demand stabilizes or the Federal Reserve signals more aggressive easing, silver is likely to continue to underperform relative to gold. The baseline scenario remains range-bound trading influenced by headlines.

At 22:02 Beijing time, spot silver was quoted at US$37.294 per ounce, up 0.79%.