Silver Market Steadies on Supply Strain Chart Patterns Hint at Next

Silver prices held steady in the past 24 hours, with the front-month Comex contract settling at $36.42 per troy ounce early Tuesday, June 17, 2025. This price sits just below last week’s 13-year high of $36.69, reflecting a market that remains firm but cautious.

Data from the attached daily and 4-hour charts confirm a consolidation phase after a sharp rally, with technical indicators suggesting the market is gathering strength for its next move.

The charts show silver trading above all major moving averages, including the 50-day and 200-day lines. The daily Relative Strength Index (RSI) stands at 68.91, close to overbought territory but not yet signaling a reversal.

The MACD histogram remains positive, though it has started to contract, hinting at slowing momentum. Bollinger Bands are wide, indicating recent volatility, but the price has settled near the upper band without a breakout.

On the 4-hour chart, the RSI reads 56.33 and the MACD is flat, showing a loss of short-term momentum but no clear sign of a breakdown. Support levels cluster around $35.65 and $34.95, while resistance stands at $37.65.

Fundamentals continue to favor the bulls. The silver market faces its fifth consecutive annual deficit, with industrial demand for electronics, photovoltaics, and electric vehicles outpacing a modest 3% rise in global mine output.

Silver Rally Fueled by Record Industrial Demand

Analysts expect industrial fabrication to reach an all-time high this year. Despite a 5% increase in recycling and higher production from China, Canada, Chile, and Morocco, the deficit is projected at 149 million ounces, according to sector data.

This persistent shortfall, combined with robust demand, has underpinned prices throughout the year. Investor flows into silver exchange-traded funds (ETFs) have surged.

Assets under management in silver ETFs have risen by 126% in the past year, far outpacing gold ETFs. Inflows reached Rs 853.85 crore in May alone, nearly three times those of gold, as investors sought exposure to both silver’s industrial uses and its safe-haven status.

This trend marks a significant shift in investor preference, with retail participation also climbing sharply. Macroeconomic factors also support silver.

The US dollar’s recent weakness, tied to fiscal concerns and a $4 trillion rise in the debt ceiling, has made dollar-denominated blockets like silver more attractive.

Geopolitical uncertainty, especially around tariffs and Middle East tensions, continues to drive safe-haven demand. However, headwinds remain, including concerns over the Chinese economy and the potential for rising US Treasury yields.

The technical picture now suggests a pause rather than a reversal. The market has absorbed recent gains and sits in a consolidation zone. If silver breaks above $37.65, it could trigger further buying, while a drop below $34.95 would likely prompt profit-taking.

For now, the story remains one of tight supply, strong industrial demand, and cautious optimism, with the market waiting for a new catalyst to set direction.