Silver Price Analysis: XAG Slip to $29.64 Amid Easing Geopolitical Risks and Strong Dollar

This truce, which marks a pivotal moment for the region, has encouraged displaced residents near conflict zones to begin returning home.

Despite these improvements, the broader stabilization has diminished the appeal of Silver as a hedge against instability, exerting additional downward pressure on its price.

The easing of geopolitical risks coincides with a strengthening US dollar, creating a dual headwind for Silver prices.

Strong US Dollar and Fed Policy Weigh on Silver

The US dollar has maintained its upward trajectory, supported by robust economic data and a cautious Federal Reserve stance. The October Personal Consumption Expenditures (PCE) Price Index, a key inflation measure, increased by 2.3% year-over-year, up from 2.1% in September.

Similarly, the core PCE, excluding volatile food and energy prices, rose to 2.8%, slightly higher than the previous month’s 2.7%.

These figures suggest persistent inflationary pressures, keeping the Fed wary of cutting interest rates. The Federal Reserve’s November minutes revealed a clear focus on controlling inflation and closely monitoring the strong labor market.

This cautious monetary policy strengthens the dollar, adding further downside pressure to Silver as the non-yielding asset becomes less attractive.

 [[XAG/USD-graph]]

Silver’s Technical Outlook and Future Trajectory

Technically, Silver remains under pressure, trading below its pivot point of $30.22. Immediate resistance lies at $30.75 and $31.44, while support levels are marked at $29.16 and $28.72.

The metal’s price action reflects bearish sentiment, exacerbated by the stronger dollar and diminishing safe-haven demand.

The Relative Strength Index (RSI) near 34 signals oversold conditions, hinting at a possible short-term rebound. However, a break below $29.65 could lead to deeper declines, while a move above $30.22 is necessary to regain bullish momentum.