Silver (XAG/USD) slid below $32.00 on Thursday, falling to $31.79 and breaching a crucial ascending triangle support zone. This technical breakdown comes as traders brace for U.S. producer price index (PPI) data—seen as a key signal for the Federal Reserve’s next policy move. A dovish shift in rate expectations has increased focus on high-risk assets, weakening demand for safe-haven metals like silver.
Adding to the pressure, the recent U.S.-China trade truce has lifted broader market sentiment. The two economic giants agreed to cut tariffs and pause hostilities for 90 days, giving investors a reason to rotate into equities and away from hedges like silver and gold.
“With trade risks easing, people are looking at riskier assets again,” noted Brian Lan, Managing Director at GoldSilver Central in Singapore.
Fed Caution and Economic Signals
Despite cooling inflation and soft consumer data, the Fed remains hesitant to cut rates immediately. Policymakers are weighing the long-term impact of President Trump’s trade policies before adjusting monetary tools. Markets now anticipate a 50-basis-point rate cut later in the year—likely in October rather than July.
Fed Chair Jerome Powell’s speech today will be closely watched for signs of policy direction. Lower rates generally support precious metals by reducing opportunity costs, but current momentum is favoring equities over bullion.
For silver, the mixed signals are creating a complex landscape: macro uncertainty is supportive, but technical damage is attracting short sellers.
Technical Breakdown and Trade Setup
Technically, silver’s price action has turned bearish. The 2-hour chart reveals a break below ascending support, with the price now struggling near $31.79. Momentum indicators such as the MACD remain in negative territory, signaling continued downside risk.
Silver Price Chart – Source: Tradingview
Trade Setup Summary:
Entry Zone: Watch for a retest and rejection of $32.00–$32.20
Target Levels: $31.36 and $30.93
Stop-Loss: Above $32.52 (aligned with 50-period EMA)
This setup caters to momentum traders. Confirmation via bearish rejection at resistance offers a more favorable entry. With key economic data on deck, volatility could create sharp moves—stay cautious, and protect downside risk.