Silver (XAG/USD) traded in the low $73.00s during Friday’s European session after failing to hold gains near $75.00. It was heading for a second straight weekly fall as the US Dollar gained support from a more hawkish Federal Reserve stance.
The Fed kept rates in the 3.5%–3.75% range, and three policymakers opposed keeping “easing bias” wording in the statement. CME FedWatch showed futures markets leaning towards a rate rise in 2027.
Fed Leadership And Market Implications
Jerome Powell, whose term ends on May 15, said he would remain a Governor. This follows expectations that President Donald Trump may press the next Fed chair, Kevin Warsh, to cut rates.
Technically, silver was consolidating just above $73.00, with the wider downtrend still in place. On the 4-hour chart, RSI hovered near 50 and MACD gave a mild positive signal.
Resistance levels were noted at $74.75, $76.75, and $78.65. Support levels were seen at $72.80, then near $71.00 and $68.30.
We see the Federal Reserve’s recent hawkish pivot as the dominant force pressuring silver prices. The US Dollar Index has surged past 108 for the first time since late 2024, reflecting market expectations for higher rates for longer. With the 2-year Treasury yield now firm at 3.9%, holding a non-yielding asset like silver becomes increasingly expensive.
Strategy And Risk Management
Our response should be to position for further downside or consolidation below the $75 resistance level. Selling out-of-the-money call options with strike prices near $76.00 or $77.00 could be a prudent strategy to collect premium, capitalizing on the expected price ceiling. The Cboe Silver Volatility Index (VXSLV) is elevated near 35, making option premiums attractive for sellers right now.
We must remain aware of the upcoming leadership change at the Fed on May 15, which introduces significant event risk. To manage this uncertainty, purchasing put options with a strike price around $71.00 offers a defined-risk way to profit from a drop towards the April lows. This cautious approach is warranted, especially as recent data from early 2026 shows a slight moderation in industrial silver demand from the solar sector compared to the record highs we saw in 2025.
