SLV ETF analysis: What next for silver prices?

Silver price has held steady after pulling back from the recently hit 13-year high. While successful trade talks have eased safe haven demand, trade optimism and the Fed meeting’s expectations have bolstered the dual status metal. 

iShares Silver Trust (SLV), which tracks the price of the silver bullion, has been up by 30% since early April when the US imposed harsh levies on several of its trade partners. During that timeframe, silver price has rallied by 34% compared to gold’s 12%. In the short term, silver price may continue outperforming its more lustrous cousin on the back of its status as an industrial metal and conventional safe haven asset.

Trade optimism steadies iShares silver price

Trade tensions stemming from President Trump’s aggressive tariffs have bolstered the demand for safe-haven assets in recent months. More specifically, these uncertainties have fueled iShares silver price’s 30% surge since early April.   

However, recent trade deals have had silver price pull back from the 13-year high hit a week ago. Following its trade agreement with Japan earlier this month, the US has now reached a deal with the European Union. The 15% baseline tariff rate agreed upon by the two parties is half of what President Trump had threatened to impose. 

Besides, after the two-day trade talks in Stockholm, the US and China officials have agreed to extend the 90-day tariff truce. However, the US officials have indicated that it is now up to Trump to decide whether or not he will extend the current deadline of 12th August.   

Notably, the eased trade tensions have improved the market mood; maintaining the fear & greed index on the greed end of the spectrum. This has eased the demand for precious metals and other safe haven assets. Nonetheless, uncertainty over the state of the economy has capped silver price losses.  

At the same time, iShares Silver Trust has found support along the short-term 20-day EMA at $34.36 as investors await cues in the event-packed week. From the two-day Fed meeting to inflation and employment data, the released figures are set to impact safe haven assets and the broader financial markets.  

Market participants expect the Federal Reserve to leave its benchmark lending rate unchanged at between 4.25% and 4.50%. However, the focus will be on Jerome Powell’s remarks on the possibility of a rate cut as soon as September. What’s more, a day after the central bank’s interest rate decision, the US Bureau of Economic Analysis is set to release the Fed’s preferred gauge of inflation, the personal consumption expenditure (PCE). 

Aggressive import levies and bearish pressure on the US dollar have heightened uncertainty about the health of the country’s economy. In addition to that, the expected data may be additional signals for the Federal Reserve to remain wary. 

Experts expect the core PCE index to rise to 0.3% month-on-month compared to May’s 0.2%. The July nonfarm payrolls and unemployment rate slated for release on Friday are also expected to show the impact of Trump’s aggressive tariffs already kicking in.    

The successful trade talks and Fed meeting’s expectations have maintained the US dollar’s recent gains even as the benchmark 10-year Treasury yield pulls back. While a stronger greenback tends to be bearish for the dollar-priced silver, trade optimism and safe haven demand are set to continue supporting iShares silver ETF price, at least in the short term.  

iShares silver ETF price technical analysis

SLV ETF chart | Source: TradingView

After pulling back from the 13-year high hit a week ago, iShares silver trust’s bulls have successfully defended the support along the 20-day EMA at $34.36. However, in line with the fundamentals, the relatively neutral RSI of 56 points to range-bound trading in the immediate term.

As the market processes the week’s events, the range between the support level of $34.36 and $35.30 is worth watching. Further rebounding may have the ETF face resistance close to the recent multi-year high at $35.72. However, this bullish thesis will be invalidated by a move below the lower support zone of $33.75.