During the Asian session on Friday, spot silver (XAG/USD) continued its correction trend of the previous trading day, falling to $53.65 per ounce during the session, down from the historical high of $54.86 set yesterday.

Despite short-term profit-taking pressure, the overall market risk sentiment remains defensive, supporting silver to maintain a strong operating range.

Renisha Chainani, head of precious metals research at Augmont, said: "As holiday demand gradually weakens, market volatility is expected to ease. The return of arbitrage and narrowing premiums after the holiday will stabilize silver prices, and the market is expected to return to normal rhythm starting next week."

Analysts pointed out that as holiday demand in Asian countries came to an end, investors began to take profits, while institutional traders rebalanced their positions, causing silver prices to fall slightly from their highs. On the other hand, safe-haven demand and expectations of a Fed rate cut are still supporting silver's medium-term trend.

Federal Reserve Chairman Jerome Powell hinted on Tuesday that another quarter-point rate cut is possible this month to counter a slowing job market and rising economic risks. Market data showed traders have almost fully priced in the possibility of rate cuts in October and December.

Lower interest rates reduce the opportunity cost of holding non-yielding silver assets, thus supporting prices. Furthermore, ongoing trade concerns and the risk of a US government shutdown are also providing safe-haven buying for precious metals. With the intensification of disagreements over port fees, market concerns about the global economic outlook have resurfaced.

At the same time, the US fiscal deadlock extended into its third week, and investors remained cautious about the outlook for the US dollar, thereby increasing their willingness to allocate to silver.

From a technical perspective, the daily silver chart shows that the price has shown signs of correction after forming a stage top near $54.80. The short-term support level is at $53.50, which is the key defense line of the recent upward trend.

A break below this level could lead to a further retest of $52.80. Conversely, a retest above $54 could rekindle the upward trend and challenge $55. The MACD crossover at a high level suggests weakening short-term momentum, while the RSI retreats from the overbought zone to around 65, signaling a period of moderate market consolidation.



Editor's opinion:

The silver market is currently consolidating at a high level. Supported by safe-haven demand and expectations of interest rate cuts, silver's downward potential is limited, but a post-holiday decline in demand and technical correction pressure will exacerbate price volatility in the short term.

If the Fed continues to send dovish signals in subsequent statements, silver is expected to strengthen again; however, if inflation and employment data stabilize, precious metals may usher in a period of adjustment. Overall, silver prices will mainly fluctuate at high levels in the fourth quarter, with attention focused on breaking through the $53 support and $55 resistance levels.