Silver price gained marginally, edging closer to the $38.00 mark amid a cautious market sentiment. The precious metal attracted slight bids during the European trading session, as investors awaited a high-profile meeting between the US President and the Ukrainian President at the White House.
The geopolitical developments surrounding this meeting are being closely watched by market participants, given Silver’s traditional role as a safe-haven asset. Michael P Jones, broker at AureliusHub, presents a step-by-step breakdown of this issue in his article.
US Secretary of State Marco Rubio confirmed that several European and NATO members are expected to join the meeting, where discussions will focus on concessions proposed by the Russian President to end the ongoing Ukraine-Russia conflict. Any signs of a truce between the two nations could hurt safe-haven metals, including Silver, as geopolitical uncertainty typically boosts demand for such non-yielding assets.
Despite the cautious sentiment, Silver continues to receive support from expectations that the Federal Reserve (Fed) will cut interest rates during its September policy meeting. Historically, lower interest rates benefit non-yielding assets like Silver, as reduced yields on traditional interest-bearing instruments make precious metals more attractive.
According to the CME FedWatch tool, the probability of a September rate cut is currently 82.6%, reflecting market confidence amid cooling labor market conditions.
Silver Technical Analysis
Silver (XAG/USD) edged higher to near $38.10 on Monday, while volatility contracted sharply, forming a Descending Triangle pattern on the daily timeframe. In this chart formation, the horizontal support is drawn from the July 7 low around $36.16, whereas the downward-sloping resistance extends from the July 23 high near $39.53.
The pattern indicates that market indecision persists, as investors weigh both geopolitical risks and monetary policy expectations.
The 20-day Exponential Moving Average (EMA) is currently around $37.90, and Silver’s price wobbles near this key technical level, suggesting a sideways trend in the short term. Traders are closely monitoring whether the price will break above resistance near $39.53 or fall below support around $36.16, which could dictate the next directional move.
The 14-day Relative Strength Index (RSI) remains confined within the 40.00–60.00 range, reflecting a lack of momentum and indecisiveness among market participants. This neutral RSI reading further supports the case for sideways consolidation, as neither bulls nor bears are asserting dominance.
From a support perspective, the June 24 low at $35.28 serves as a key floor for Silver. A break below this level could trigger further downside pressure, especially if coupled with a positive geopolitical outcome, reducing the demand for safe-haven metals.
Conversely, a break above the July 23 high at $39.53 would be technically significant, potentially signaling a resumption of bullish momentum and attracting additional buying interest from traders targeting short-term gains.
Market Sentiment and Drivers
The market sentiment for Silver remains mixed, influenced by two primary factors: geopolitical developments and monetary policy expectations. On the geopolitical front, the US-Ukrainian talks are critical, as any truce or peace agreement could dampen Silver demand in the near term.
Investors often turn to Silver as a hedge against uncertainty, and a reduction in geopolitical tension may lead to profit-taking and price retracements.
On the monetary policy side, the Fed’s anticipated interest rate cut continues to offer underlying support. A lower federal funds rate reduces the opportunity cost of holding non-yielding assets, making Silver and other precious metals more attractive relative to fixed-income securities. This dynamic is likely to keep Silver prices buoyant, especially if upcoming economic data reinforces expectations of a softening US labor market.
Traders are also keeping an eye on the Descending Triangle breakout levels, which serve as technical triggers for potential trend continuation or reversal. A sustained move above $38.50–$39.00 could mark the start of a short-term rally, while a drop below $37.00 might indicate renewed downside risk.
Conclusion
In summary, Silver price action remains fragile yet supported as it approaches $38.00. Market participants are balancing geopolitical risk factors, such as the US-Ukrainian discussions, with monetary policy expectations, particularly the high likelihood of a Fed rate cut in September.
Technical indicators, including the 20-day EMA, Descending Triangle formation, and RSI, all point toward a period of consolidation, with key support at $36.16 and $35.28 and resistance near $39.53.
For traders and investors, the interplay between geopolitical developments and interest rate expectations will likely dictate Silver’s near-term trajectory, making it critical to monitor both news events and technical levels closely. With the market hovering near the $38.00 milestone, Silver remains sensitive to shifts in risk sentiment and macroeconomic policy signals, underlining its status as a strategically significant precious metal in turbulent times.
