Silver price cracks as traders test how deep the selloff can go

Silver’s selloff is becoming harder to dismiss as a routine pullback.

The metal dropped towards $63 an ounce after a brief attempt to steady, hit by the same forces pressing on gold: a stronger dollar, rising US rate expectations and fading demand for crisis hedges as traders assessed progress in US-Iran talks.

The chart is also working against bulls.

XAG/USD remains trapped below key short-term averages and inside a falling channel, leaving dip buyers with little technical confirmation that the worst of the move is over.

Fed bets turn silver into a rates trade

Silver fell more than 3% to trade near $63.20 an ounce in Asian hours, extending a weak run after modest gains in the previous session.

The decline came as the dollar held close to a one-year high, making precious metals more expensive for non-dollar buyers.

The pressure is not only about currency moves. Traders are increasingly pricing the chance that the Federal Reserve will raise rates again this year if inflation proves sticky.

That shift hurts silver because the metal, like gold, offers no yield. When Treasury returns rise, the opportunity cost of holding bullion also rises.

Silver’s industrial demand story has not disappeared, but it is being overshadowed by the macro backdrop.

A stronger dollar and tighter financial conditions have become the market’s immediate focus.

The chart still favours sellers

The technical picture remains fragile.

Silver is trading well below both its nine-day and 50-day exponential moving averages, a setup that suggests rallies are still being sold rather than chased.

Source: TradingView

The 14-day relative strength index is near 34.6, just above oversold territory.

That points to persistent bearish momentum, although it also suggests the pace of selling may be getting stretched. For now, technicians are watching the six-month low of $61.01 as the first meaningful support level.

A clean break below that floor could expose the lower boundary of the descending channel near $57.50.

That would mark a deeper unwinding of the rally that had carried silver sharply higher earlier this year.

Bulls need a break above $66

The first hurdle for any recovery is the nine-day EMA near $66.31.

A move above that level would not end the bearish trend, but it would show that sellers are losing some control.

The larger test sits near the upper end of the falling channel, around $69.70. If silver can push through that area, attention would turn to the 50-day EMA near $72.70.

Only a sustained break above that medium-term level would make the recovery look more convincing.

Until then, the risk remains tilted lower. Silver needs either a softer dollar, a cooler inflation signal or a decisive technical breakout to change the tone.

Without one, the market may keep treating rebounds as selling opportunities.