SLV silver ETF, which tracks the price of the silver metal, recorded gains for the 8th consecutive week. A weaker US dollar, economic uncertainties, and expectations of more interest rate cuts have steadily bolstered precious metals. However, having been in the overbought territory for a couple of sessions now, the ETF is set for a corrective pullback in the near term.
Safe-haven demand offsets customer resilience amid fresh tariff package
SLV silver ETF hit a fresh 14-year high on Friday, holding steady above the previously evasive zone of $40, as the Fed’s preferred gauge for inflation came in as forecasted. Financial markets did not expect a wild move from the PCE data.
True to analysts’ predictions, August’s core PCE came in at 2.9% YoY after a 0.2% surge for the month. Based on these readings, the Fed will likely remain on course for more interest rate cuts. The market is pricing in two more quarter percentage point cuts by the end of 2025. More specifically, there is strong betting for a reduction in October and possibly another one in December.
While the inflation data showed resilient consumers in the wake of Trump aggressive tariffs, the latest wave of levies has held SLV silver ETF steady above the previously evasive zone of $40. On Thursday, the US President announced a new package of tariffs to take effect from 1st October, including a 25% levy on imported heavy-duty trucks.
As has been the case in previous months, precious metals are benefiting from economic uncertainties. Besides, Trump’s trade policies have been weighing on the US dollar; making silver and other dollar-priced assets less expensive for investors holding foreign currencies.
SLV silver price technical analysis
SLV silver price held steady above the multi-year resistance zone of $40 on Friday to trade at a fresh 14-year high of $41.48. To date, it has risen by about 35% amid a surge in silver’s safe-haven appeal. As the week marks a higher level of precious metals’ rallying, the ETF has risen past the bullish channel that has shaped its movements since early April when Trump’s aggressive tariffs pulled it back to January’s lows.
A look at its daily price chart shows the SLV silver ETF in the overbought territory at an RSI of 78. As such, a corrective pullback is highly likely as investors secure their profits.
In the near term, the ETF may drop below $40. This will likely place it within a range of between the 25-day EMA at $37.83 and the resistance-turn-support zone of $39.50. For as long as the asset remains within or above the bullish channel, the bulls will still be in control.
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