Trading Silver as it Breaches $47
Technical overview remains bullish in both daily and weekly time frames, and trader bias remains heavy to extreme buy.
We got a record high for gold this morning making quick work of $3,800 and up well over 1%, but its precious metal cousin silver is outperforming up over 2% and reaching $47 for the first time since 2011. It’s up a stellar 18% so far this month as September soon ends and would mean five consecutive months of gains. The gold/silver ratio has resumed its decline briefly breaking beneath 81 and at lows unseen since October.
There have been several catalysts aiding the precious metal sphere, with rising uncertainty, hot geopolitical tensions that net don’t seem to calm down even when there’s promise of an agreement in one part of the world, central bank demand in an era of increased tariff uncertainty and sanctions, strong ETF inflows, rising US government shutdown risks taking more of the recent attention, as well as a pullback for the greenback in the FX market as Federal Reserve (Fed) rate cut likelihoods remain notable. Market pricing (CME’s FedWatch) remains not too far off fully pricing in a 25bp (basis point) cut in the Fed’s October meeting and via majority sees another reduction in December.
Speaking of the Federal Reserve, we heard from a couple FOMC (Federal Open Market Committee Members) recently, Bowman that a weakening labor market suggests the central bank could be “at serious risk of already being behind the curve” with continuing conditions potentially requiring adjusting policy “at a faster pace and to a larger degree going forward”, and Barkin that they need “to move a little bit toward employment mandate” given “looks a little shakier” while inflation is “better” with risks to both limited.
As for US economic data, PCE (Personal Consumption Expenditures) price index for August were in line with forecasts up 0.3% m/m (month-on-month) for headline with core 0.2% again, and y/y (year-on-year) growth of 2.7% and 2.9%, respectively. That’s still above the Fed’s inflation target but weakness in the labor market if more apparent would give it an excuse to cut rates further. Personal spending (+0.6%) and income (+0.4%) for the same month were both a notch above expectations, and when it comes to UoM’s (University of Michigan) revised figures for consumer sentiment, it showed a drop to 55.1 with inflation expectations also trimmed (1Y from 4.8% to 4.7%, 5Y from 3.9% to 3.7%).
Week ahead
When it comes to the week ahead, traders will note whether the US government will shut down as its deadline approaches, otherwise in terms of economic data we’ve got manufacturing PMIs (Purchasing Managers’ Index) on Wednesday, the weekly claims on Thursday, and both services PMIs and the market-moving Non-Farm Payrolls on Friday.
Silver’s technical overview, strategies and levels
Looking at the daily time frame and price is clearly above all its main moving averages (MA) and walking the upper end of the Bollinger Band, on the DMI (Directional Movement Index) front the +DI well above the -DI to easily give it a positive label, an RSI (Relative Strength Index) moving further into overbought territory, and an ADX (Average Directional Movement Index) clearly in trending territory. That means a bullish technical overview which as seen below was and still is ‘bull average’ in both daily and weekly time frames, while keeping in mind that moves like this usually make it more ‘volatile’ in terms of the overview should the increase in price continue to combine with a serious uptick in volatility.
Price is already near today’s 2nd Resistance level on the daily time frame as of writing, and not far off the weekly’s 1st Resistance level. Conformist strategies are for those who expect the technical overview to hold and in turn have buy strategies to contend with whether via breakout off the Resistance levels or only after a significant reversal off the 1st Support waiting for any break beneath it to be sizable and only initiating after a recovery to the 1st Support (daily or weekly) should it occur. Those who see the latest moves as failing to hold fall in the contrarian camp armed with sell strategies whether via reversal off the 1st Resistance or sell-breakouts off the 1st Support, keeping in mind that so far it has been conformists who have won out considerably thanks to the latest bull run.
Capital.com’s client sentiment for Silver
It’s a clear story of majority buy bias when it comes to both Capital.com’s clients as well as CoT speculators. In the case of the former, they remain in heavy buy territory and while at times have closed out longs on a price increase, any persistence in the trend is causing them to recalculate entry and reconsider range-trading strategies vs trend-trading ones. As for CoT (Commitment of Traders) speculators, they’re also net long and remain in extreme buy territory according to the latest report out of the CFTC, with an increase in longs (695 lots) and a small drop in shorts (-43) failing to shift the overall buy percentage rate from 78%.
Client sentiment mapped on the daily chart
Source: Capital.com
Period: JULY 2025 – SEPTEMBER 2025
Past performance is not an indicator of future results.
Silver’s chart on Capital.com's platform with key technical indicators
Source: Capital.com
Period: JULY 2025 – SEPTEMBER 2025
Past performance is not an indicator of future results.