Silver prices (XAG/USD) maintained their strength during Wednesday's Asian trading session, climbing close to the $92 level and marking a fourth straight day of gains.
Amid escalating geopolitical uncertainties, robust demand for safe-haven assets continues to provide sustained support for silver prices. Current market sentiment is notably influenced by heightened tensions in the Middle East. Regional instability, coupled with risks of external intervention, has sparked investor concerns over security and energy supplies.
In an environment of declining risk appetite, silver, alongside gold and other precious metals, is attracting capital inflows. Concurrently, uncertainty surrounding the US monetary policy outlook has also become a significant factor driving silver higher.
Recent discussions about the Federal Reserve's policy independence triggered a noticeable weakening of the US Dollar, with markets worrying that any compromise to central bank independence could adversely affect financial system stability and sovereign credit assessments.
Against this backdrop, safe-haven assets have demonstrated overall strength. Although several major central bank leaders subsequently voiced public support for the Fed, leading to a rapid rebound in the Dollar, silver has not significantly relinquished its gains, indicating strong and persistent allocation by safe-haven funds.
Overall, the current silver price movement is being driven more by sentiment and risk premiums rather than short-term fundamental changes.
From a technical perspective, silver is trading within a clear upward channel, with the daily chart's bullish trend remaining intact. The price continues to hold firmly above the main moving average system, with both short-term and medium-term averages arranged in a bullish formation, suggesting buying forces still dominate the market.
Regarding momentum indicators, the 14-day Relative Strength Index (RSI) has risen to 74.77, entering typical overbought territory and climbing further from the previous 72.52, indicating that upward momentum is still strengthening.
However, this also implies that room for further sharp short-term gains is narrowing. If the RSI gradually retreats and stabilizes around 70, it would help the market digest its gains through consolidation, paving the way for a more sustainable subsequent advance.
Conversely, if the RSI surges rapidly towards the previous extreme level near 85.90, the silver price could face a risk of a more pronounced technical correction due to momentum exhaustion.
In terms of key levels, $90 serves as a crucial psychological and technical barrier; a decisive break and hold above this level would open further upside potential. Support below is focused in the $86-$87 range; a breach of this zone could lead to an extended short-term correction.
Editorial View: Silver's current strong performance is primarily fueled by a concentrated release of safe-haven demand. In an environment marked by both geopolitical uncertainty and policy-level risks, the willingness to allocate funds to precious metals is unlikely to cool significantly in the short term.
Nevertheless, caution is warranted as technical indicators have clearly entered overbought territory, and the steepening price "slope" typically signals a concurrent increase in volatility risk.
In the short term, the attractiveness of chasing the rally is diminishing, and the market is more likely to digest gains through high-level fluctuations or a pullback. The medium-term direction will still depend on whether safe-haven sentiment persists and further developments in the US Dollar's trajectory.
