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Silver drops under $81 as US Dollar Index reaches highest point in three and a half months

Silver drops under $81 as US Dollar Index reaches highest point in three and a half months

101 finance101 finance2026/03/13 17:18
By:101 finance

Silver Prices Continue Downward Trend Amid Oil Recovery and Strong US Dollar

Silver prices have declined for a third consecutive day, dropping by more than 2.90%. This comes as oil prices rebound, despite US President Donald Trump temporarily lifting sanctions on Russian oil for 30 days. Meanwhile, the US Dollar remains close to its highest level in three and a half months. At present, XAG/USD is trading at $80.16, on track to finish the week with losses nearing 5%.

Higher Yields and Firm Oil Prices Pressure Silver Despite Expectations for Fed Rate Cuts

Although the overall market sentiment is cautiously optimistic, it remains delicate. US stock indices have posted gains between 0.40% and 0.43%. Recent US economic reports indicate that growth slowed following the 43-day government shutdown, and inflation persists, as shown by the Core PCE data.

The second estimate for US GDP in the fourth quarter of 2025 was revised down from 1.4% year-over-year to 0.7%. The Federal Reserve’s preferred inflation measure held steady at 3.1% year-over-year in January, while the headline inflation rate edged down from 2.9% to 2.8% year-over-year.

After the GDP figures were released, investors increased their expectations for Federal Reserve rate cuts in 2026. Early in the session, rate cuts were priced at 17 basis points, but now projections have risen to at least 19.5 basis points, according to Prime Market Terminal.

Source: Prime Market Terminal

Ongoing tensions in the Middle East are anticipated to drive global inflation higher. Earlier this week, WTI crude oil reached a yearly peak near $120.00 per barrel, but has since retreated to $95.90. This surge has pushed gasoline prices up by over 20%, reaching $3.60 per gallon since the conflict began two weeks ago.

Meanwhile, the US Dollar Index (DXY), which measures the dollar against six major currencies, has climbed 0.61% to 100.35.

US Treasury yields have also risen, with the 10-year note increasing by 2.5 basis points to 4.287%, creating additional challenges for silver, which does not offer yield.

President Donald Trump has stated that the US will take decisive action against Iran in the upcoming week, following the partial 30-day waiver for purchasing sanctioned Russian oil.

Market participants will continue to monitor geopolitical events over the weekend, before shifting their attention to the Federal Reserve’s meeting scheduled for March 17-18. Additionally, upcoming releases on industrial production, housing, the Producer Price Index (PPI), and employment data will be closely watched.

Silver Technical Analysis: Bearish Momentum Points to Potential Break Below $80

On the daily chart, XAG/USD shows a short-term bearish outlook as prices fall below a cluster of medium-term simple moving averages around $86–$87. These averages are further limited by a descending resistance line from $96.62, now positioned near the mid-$80s. Repeated rejections from the $93.80 area and subsequent lower highs along this resistance suggest weakening upward momentum. The Relative Strength Index (RSI) is moving toward 45, indicating increasing downward pressure rather than oversold conditions.

Initial resistance is found near $83.00, where recent highs sit just below the descending trend line. A stronger resistance is located around $86.00, aligned with the grouped moving averages. A daily close above $86.00 would help alleviate the bearish sentiment and open the path toward $90.00. On the downside, immediate support is at $78.00, protecting the more significant $74.00 level, which coincides with previous lows and a broader rising trend-line from lower prices. Breaking below $74.00 would target $70.00 and confirm a deeper correction within the longer-term uptrend.

(Technical analysis for this article was assisted by an AI tool.)

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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