Spot silver attempted a rebound to near $75 during Wednesday's Asian trading session but quickly faced renewed selling pressure, retreating to around $74 and approaching the near two-week low set on Tuesday. The broader market remains pressured by a strong U.S. dollar and elevated Treasury yields, with short-term bearish sentiment continuing to dominate.
Risk aversion has notably intensified in global financial markets recently. Ongoing tensions in the Middle East, coupled with a lack of substantive progress in U.S.-Iran negotiations, have kept markets on high alert regarding risks to transport through the Strait of Hormuz and global energy supply. Persistently high international crude oil prices have reignited concerns about a potential resurgence in global inflation. Against this backdrop, markets are increasingly betting on the possibility of the Federal Reserve maintaining higher interest rates or even implementing further hikes.
Latest market interest rate expectations show traders have significantly increased their bets on the Fed maintaining a prolonged hawkish stance, directly fueling a continued rise in U.S. Treasury yields. The 10-year Treasury yield remains above 4.68%, while the 30-year yield briefly climbed to 5.20%, reaching its highest level in nearly 19 years.
The high-yield environment diminishes the appeal of precious metals like gold and silver, which do not offer interest income. As bond yields rise, market capital typically flows towards dollar-denominated assets and the bond market.
Simultaneously, the U.S. dollar index has risen to near a six-week high. Since silver is dollar-denominated, a stronger dollar typically reduces the purchasing willingness of non-dollar investors, thereby pressuring silver prices. Compared to gold, silver possesses dual attributes as both a precious and industrial metal, leading to generally greater price volatility. Current uncertainties in global economic growth expectations further limit silver's demand performance.
From a technical perspective, silver's momentum has clearly weakened. A recent rebound in the 4-hour chart failed to decisively break above the 200-period Exponential Moving Average (EMA), followed by a rapid decline, signaling a resurgence in bearish strength. More critically, XAG/USD has broken below the lower boundary of a near-month-long ascending channel. This indicates the breakdown of the uptrend structure that had persisted for several weeks, with short-term market momentum tilting bearish. Following this technical breakdown, numerous short-term long positions were stopped out while bearish capital re-entered the market, accelerating silver's decline. Observing the daily chart structure, silver's recent highs have been successively lower, with the price's center of gravity continuously declining, reflecting persistent selling pressure. The Relative Strength Index (RSI) has fallen to around 31, nearing oversold territory. This suggests strong short-term bearish momentum, yet the market has not entered extreme oversold conditions, leaving room for further downside potential.
Meanwhile, the MACD indicator remains below the zero line with its histogram in negative territory, further confirming the ongoing bearish trend. However, it's worth noting that the RSI is gradually approaching oversold levels, indicating the potential for a technical rebound or correction in the short term. Yet, as long as the overall trend remains unchanged, any rebound is more likely to be viewed by the market as a fresh selling opportunity. Regarding resistance, $76.33 is the first key level, corresponding to the previously broken lower channel line. Further resistance lies near $78.25, aligning with the 200-period EMA on the 4-hour chart, which has now formed a clear technical supply zone. Only if silver can reclaim and stabilize above the $76.30 to $78.20 zone might bearish pressure significantly ease, allowing for a resumption of a phased recovery structure. On the downside, $74 has become a key short-term support level. A subsequent break below this level could lead to a test of $73 or even the $70 integer region.
Overall, the silver market is currently facing a triple-pressure structure: dollar strength, rising yields, and technical breakdown. In the near term, expectations for Fed policy, Treasury yield movements, and the dollar index trajectory will remain core factors influencing silver's direction.
The silver market has entered a distinct phase of weakness. While Middle East tensions provide some safe-haven sentiment, market capital is predominantly flowing towards the dollar and high-yield bond assets, exerting sustained pressure on silver. Technically, silver's break below the key ascending channel and the 200-period EMA on the 4-hour chart has further reinforced the bearish trend. Although the RSI is nearing oversold territory, potentially allowing for a short-term technical rebound, silver's overall bias remains tilted towards weak consolidation against the backdrop of a strong dollar and high yields. Future market focus will center on the Fed meeting minutes, changes in Treasury yields, and the evolution of global risk sentiment, which will determine whether silver can stabilize and regain upward momentum.