Silver slipped while trying to hold above $81.00 in European trading on Wednesday, as the US Dollar attempted to recover after a seven-day fall. The US Dollar Index (DXY) rose towards 98.10 and stayed close to a near seven-week low of 98.00.
Market focus remains on the prospect of a US-Iran ceasefire, with Donald Trump saying a permanent deal could be reached within the next two days. He also said he does not think extending the two-week ceasefire will be needed.
Silver has faced mixed drivers as easing tensions can lower demand for safe-haven assets, while changes in oil prices have affected inflation expectations. The CME FedWatch tool shows a 65% chance the Federal Reserve will make no monetary policy change this year.
XAG/USD traded near $79.50 after selling near $81.00 and remained above the 20-day EMA at $75.91. Price action stayed within an ascending triangle on the daily chart.
The 14-day RSI held in the 40.00–60.00 range, pointing to reduced volatility. Support sits at $75.91 then $74.51, while a break above $81.00 could open a move towards $85.
The current struggle for silver around the $81.00 mark is a familiar picture, reminding us of the situation back in 2025. At that time, optimism over a US-Iran ceasefire was the main story, helping to cap energy prices and Federal Reserve rate hike expectations. Now, in April 2026, the market drivers have evolved, but the technical levels remain highly relevant for our strategy.
Looking back, the bet in 2025 was that the Fed would stay on hold, which ultimately proved correct for most of that year. Today, the conversation has shifted entirely towards the timing of rate cuts, especially after the latest March 2026 CPI report showed inflation cooling to 2.9%. The CME FedWatch Tool now indicates a greater than 70% probability of at least one rate cut before the end of the third quarter, which provides a strong fundamental tailwind for a non-yielding asset like silver.
The weakness in the US Dollar we saw developing last year has continued, with the DXY now barely holding above the 98.00 level. This contrasts sharply with the much stronger dollar environment we navigated back in 2024, when the index was frequently above 104. This sustained dollar weakness makes silver cheaper for foreign buyers and is a key part of our bullish outlook.
Beyond financial markets, the physical demand for silver continues to be incredibly robust, providing a solid price floor. We have seen recent industry reports confirming that industrial demand, particularly for photovoltaics and new AI data centers, grew by another 8% in the first quarter of 2026. This is a powerful trend that was not as central to the trading narrative last year but is now impossible to ignore.
Given the coiled price action and contracting volatility noted in 2025, a break above the stubborn $81.00 resistance level seems increasingly likely. We should consider buying call options with strike prices at $82 or $83 to position for a potential sharp move towards the $85 target. This strategy offers a defined-risk way to capitalize on the building upward pressure.
On the downside, we must remain disciplined and watch the technical support levels that held up last year. A decisive break below the rising trend-line, which now sits around $76.50, would signal that the bullish momentum is fading. Any positions should have protective stops placed below that critical zone.
