Silver price strengthened further on Wednesday, extending its five-day streak of gains as the dollar index stayed under pressure. The metal traded near $51.80 in the European session, up more than 1% for the day, after recovering from a mild pullback during the Asian session. The rally has pushed silver’s week-to-date and month-to-date performance to over 7%, highlighting a strong rebound in investor appetite for precious metals even as broader macroeconomic signals remain mixed.
- Silver gained over 1% to $51.80, extending its five-day winning streak on Wednesday.
- Traders raised December rate cut odds to 67% after weaker U.S. labor data.
- Silver RSI signals overbought conditions as price tests resistance near $52 psychological level.
The latest surge in silver came after investors increased bets on a potential Federal Reserve rate cut in December. The shift followed weaker labor market data from the Automatic Data Processing (ADP) report, which showed that private sector job creation dropped by more than 11,000 per week on average for the four weeks ending October 25. The data contrasted sharply with the gains recorded earlier in October, suggesting that the U.S. job market may be losing momentum. This reinforced expectations that the Fed may need to ease policy sooner, prompting traders to price in a 67% chance of a rate cut in December, up from 62% a day earlier according to the CME FedWatch Tool.
Ordinarily, progress toward resolving the prolonged U.S. government shutdown could have acted as a headwind for silver, given that an improvement in political stability typically reduces safe-haven demand. The Senate’s 60–40 vote to pass a temporary funding bill keeping the government open until January 30 and certain agencies funded through September 30 was seen as a relief measure for the economy. However, the influence of the softer labor data and the renewed dovish tilt in market expectations outweighed this, allowing silver to sustain its upward momentum despite a modest rebound in the dollar index earlier in the session.
Silver bullish structure holds firm while RSI hints at short-term consolidation From a technical perspective, silver’s bullish structure remains intact across multiple timeframes. The daily RSI has climbed to 65, showing strong momentum as the price approaches its record high near $54.40. On the 4-hour chart, however, RSI readings have entered overbought territory, suggesting the possibility of a short-term pullback.
If a mild retracement occurs, the first area of support lies around $51, where the 1-hour 20 EMA currently aligns. A deeper pullback could test $50.60, which served as a key support level in October. On the upside, a sustained break above $52 would reinforce the broader bullish trend and position silver for a potential retest of its all-time high, particularly if upcoming U.S. data continues to validate the case for monetary easing.
We discussed how silver strengthened after a four-day advance on renewed Fed rate-cut bets. The metal surged 4.6%, its biggest one-day rise since October 13.
