Silver Retreats After Tuesday’s Rally Amid Trade Deal Fatigue

Silver prices retreated to $32.757 per troy ounce on Wednesday morning, dropping 0.43% after Tuesday’s impressive 2% rally. The precious metal faces selling pressure as initial enthusiasm over the US-China trade agreement gives way to market caution.

Both nations agreed during weekend negotiations in Switzerland to reduce their respective tariffs to 10% and 30% for a 90-day period. Trading volumes remain moderate with investors reassessing positions following the recent volatility.

On domestic exchanges, silver July futures opened lower at Rs 96,650 per kg but have since recovered some losses. The metal now trades near Rs 96,730, showing resilience despite global headwinds.

Silver remains in a technical uptrend despite today’s pullback. The price currently leans on its 50-day exponential moving average for support, a critical technical level watched by traders.

The RSI indicator reads 51.14, signaling neutral momentum without overbought or oversold conditions. MACD remains slightly positive at 0.06, suggesting underlying bullish sentiment despite today’s weakness.

The chart reveals silver has maintained an impressive upward trajectory since April’s sharp selloff. Multiple moving averages now converge near the $32.50 level, creating a significant support zone.

This technical confluence explains why silver has found buying interest during today’s dip. Fundamental factors continue to support silver’s longer-term outlook. The market expects to record its fifth consecutive annual supply deficit in 2025.

Industrial demand keeps growing with volumes projected to surpass 700 million ounces for the first time, driven by ongoing structural gains in green economy applications.

ETF flows show mixed trends with silver funds posting modest gains while gold ETFs experience outflows. This divergence suggests investors may be rotating some precious metals exposure from gold to silver.

Silver has already increased 13.40% since the beginning of 2025, outperforming many other commodities. Fed Chair Powell’s recent comments maintaining interest rates at the 4.25-4.50% range continue to influence precious metals markets.

His “wait and see” approach signals careful monitoring of economic indicators before any policy shifts. Higher rates typically create headwinds for non-yielding assets like silver.

Trading Economics forecasts silver to trade around $33.55 per ounce by the end of this quarter. However, today’s price action suggests potential consolidation in the short term.

Key resistance remains at $33.50 with support at $32.50, creating the range that will likely define trading for the remainder of the week.

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