Silver traded near $73.70 in Europe on Friday and stayed below the 20-day EMA while markets awaited fresh speeches from US Federal Reserve officials after the blackout period. The Fed kept rates unchanged at 3.50%–3.75% on Wednesday, and Jerome Powell said four members dissented, with three calling to move away from an easing bias.
The CME FedWatch tool indicates rates are expected to remain at current levels through year-end. Steady rates can limit gains in non-yielding assets such as silver.
Oil Prices And Inflation Pressure
Oil rose, with WTI up 0.5% above $103, linked to the prolonged closure of the Strait of Hormuz, a route for almost 20% of global energy supply. Higher energy prices have lifted inflation expectations and can reduce the scope for easier monetary policy, which can weigh on silver.
Technically, XAG/USD was around $73.70 and remained below the 20-period EMA at $75.38. RSI was 44.48; resistance sits near $75.38, with $80.00 above, while support levels include $70.86 and $68.28.
With the Federal Reserve holding interest rates steady in the 3.50%-3.75% range, we see continued headwinds for non-yielding assets. The dissent from three committee members signals a firm anti-inflationary stance, which will likely cap any significant rallies in silver. This suggests that the path of least resistance for silver in the near term is downwards.
This view is reinforced by the latest economic data from April 2026, which showed the Consumer Price Index (CPI) unexpectedly ticking up to 3.6% year-over-year. This persistent inflation gives the Fed little reason to consider easing policy, making the dollar more attractive and weighing on silver prices. For derivative traders, this strengthens the case for bearish positions.
Industrial Demand And Macro Signals
Furthermore, industrial demand appears to be softening, another bearish signal for silver. The most recent S&P Global US Manufacturing PMI for April 2026 registered at 49.9, indicating a slight contraction in factory activity. Weaker industrial consumption, which accounts for over half of silver demand, reduces fundamental support for the metal’s price.
The geopolitical situation, particularly the prolonged closure of the Strait of Hormuz which we have seen since late 2025, is keeping WTI oil prices elevated above $103. These high energy costs feed directly into inflation, complicating the Fed’s job and forcing it to maintain a hawkish posture. This environment is broadly negative for precious metals that don’t offer a yield.
From a trading perspective, we should consider buying put options or establishing short positions on silver futures, especially if the price breaks below the key $70.86 support level. The technical chart suggests the next major target on the downside would be the April 7 low of $68.28. The current price action below the 20-day EMA at $75.38 confirms our bearish bias.
However, we are also watching the Gold/Silver ratio, which is currently elevated at 92:1, significantly above the average we saw through 2025. This historically high ratio could suggest silver is undervalued relative to gold, presenting a potential pairs trading opportunity. Traders might consider a long silver, short gold position to hedge against a broader market shift.
Given the number of upcoming speeches from Fed officials and the unresolved Middle East tensions, implied volatility is likely to rise. This makes strategies like buying straddles attractive for those who anticipate a significant price move but are uncertain of the direction. Such a strategy would profit from a sharp break either above resistance at $75.38 or below support at $70.86.
