Silver (XAG/USD) rose by over 0.50% on Friday after rebounding from a daily low of $73.95. Reports of possible renewed talks between Washington and Tehran coincided with gains in US equities and precious metals, with XAG/USD at $75.83 at the time of writing.
Price action suggests consolidation near the 20-day and 100-day Simple Moving Averages, both at $75.64. Since the March 23 low near $61.02, silver has posted higher lows, while the latest rise topped around $83.05 before pulling back towards $75.00.
Momentum indicators point to downside risk, with the Relative Strength Index described as bearish. For continuation lower, price would need to break $75.00, then the April 13 low of $72.61, followed by the April 7 low of $69.82.
If price rises, it would need to move back above the 100-day SMA and then the 50-day SMA at $78.57. Above that area, the next level noted is $80.00.
Looking back at the analysis from 2025, we can see the market was coiled for a move while consolidating around the $75 level. The pattern of higher lows was the key signal, correctly pointing toward an eventual uptrend that broke through the $83 resistance later that year. That period of indecision ultimately resolved to the upside.
The fundamental picture has become much clearer since then, strongly supporting higher prices in the weeks ahead. We’ve seen industrial demand for silver surge, with recent data from the International Energy Agency showing a 15% year-over-year increase in solar panel installations for the first quarter of 2026. The Silver Institute’s new 2026 report also confirms a fourth consecutive year of a significant supply deficit, creating a solid floor under the market.
Monetary policy is also providing a tailwind, as the Federal Reserve has signaled a pause in rate hikes due to inflation cooling to 2.8% in the latest report. This environment weakens the US dollar and makes non-yielding assets like silver more attractive for investment. The market is now pricing in a potential rate cut by the third quarter, which should fuel the next leg up.
Given this bullish backdrop, we see an opportunity in buying call options to capitalize on the expected upward momentum. Traders should consider purchasing June or July 2026 call options with a strike price around $88, just above the current trading range. This strategy offers leveraged exposure to a potential move towards the psychological $90 level and beyond.
To manage risk, we should watch the old 2025 peak of $83, which now serves as a major support level. A decisive break below this price would signal a change in trend, making protective put options with an $82 strike a prudent hedge. This protects capital if the expected breakout fails to materialize and the market reverses course.
