The silver price surged to $36.50 on Tuesday amid renewed demand for safe-haven assets. After U.S. officials strongly warned about possible tariffs on Japan, investors became cautious. These included statements made by Bessent and Trump.
Furthermore, their remarks sparked a market uproar and a resurgence in interest in silver. The metal has notably risen since Monday, when it hit a low of $35.40. It reflects a general apprehension about the status of international trade.
Tariff Troubles Push Investors Toward Precious Metals
The recent increase in silver prices is consistent with a general lack of clarity in global markets. Furthermore, the U.S. tariff threats have tempered investor optimism, causing them to turn to traditionally safer assets.
Trump complained that the trade talks were moving slowly and that Bessent threatened to impose tariffs by July 9. As a result, any negative news regarding international relations now triggers a strong reaction from markets. This change has decreased exposure to stocks and increased capital flow into precious metals.
Silver Price Struggles to Escape the Range
The price of silver (XAG/USD) has ranged from $35.40 to $37.35 over the past three weeks. It was cautious at higher levels on Tuesday after failing to hold above Monday’s high of $36.25. The 4-hour RSI near 50 supports this neutral outlook. Additionally, traders are keeping a close eye on price action for signs of a breakout or breakdown.
Doji candlesticks show a tug-of-war between bulls and bears, reflecting this indecision in the daily chart. A confirmed breakout could propel momentum to $38.00. Until then, the metal will probably move in response to any changes in the economy that affect investor sentiment. Additionally, a lack of volume could contribute to the cap on upward momentum. The lack of follow-through following intraday rallies is indicative of caution.
From a technical perspective, the $35.40 support is crucial. If this level were broken, a bearish Head & Shoulders pattern would be confirmed. Silver might be dragged toward the June 4 low of $34.10, with a measured target close to $33.43. Consequently, a large portion of silver’s recent gains might be undone. If this bearish setup unfolds, it would erase nearly half the gains made since early May. Bulls are currently holding onto the $35.40 zone as their primary protection.
Can Silver Hold as Uncertainty Builds Again?
Future price swings for silver could be caused by a variety of factors, including external factors. The outlook may be impacted by inflation data, central bank sentiment, and geopolitical headlines. At the moment, traders are closely monitoring levels of support and resistance to forecast the next course of action.
Future U.S. inflation data could cause market sentiment to shift again. Additionally, any surprise could result in notable changes to the positioning of silver. If support at $35.40 fails, the chances of a decline increase. However, a sustained break above $37.35 might be necessary for further upside. Although the market is generally cautious, there is still a need for precious metals.
Final Thoughts
Silver can rise or fall as long as market sentiment remains cautious. Traders are waiting for clarity on inflation indicators and tariffs. Until then, short-term movements in the precious metals markets will be guided by levels of support and resistance. Additionally, to verify strength, silver bulls need to regain control above $37.35. Otherwise, bears may push the metal back to $34 levels.
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