## Silver Price Drops: Key Resistance and Support Levels to Watch

As of December 27, 2024, the silver market has witnessed a significant drop, with the price slumping to near $29.60. This decline is particularly noteworthy given the backdrop of heightened geopolitical tensions, which typically would drive up demand for safe-haven assets like silver.

### Impact of Geopolitical Tensions

Despite the escalation of tensions in the Middle East, particularly between Israel and Iran, the silver price has not seen the usual uplift. Historically, such geopolitical tensions would increase the demand for safe-haven assets, but this time, other market factors have overshadowed these concerns. Israel’s recent military actions against Iran-backed Houthis and the subsequent retaliatory threats have not managed to bolster the silver price[1].

### Role of US Bond Yields and Federal Reserve Policy

The primary driver behind the current silver price drop is the rise in US bond yields. With 10-year US Treasury yields increasing to near 4.61%, the opportunity cost of holding non-yielding assets like silver has risen. This increase in yields is largely driven by expectations that the Federal Reserve will adopt a more gradual rate-cut cycle in 2025, reflecting confidence in the US economic outlook. Higher yields make interest-bearing assets more attractive, thereby reducing the appeal of silver and other precious metals[1].

### Technical Analysis: Key Levels to Watch

From a technical standpoint, the silver price has broken down below the upward-sloping trendline that was established from the February 29 low of $22.30. This breakdown near the $30.00 level indicates a weakening outlook for silver. Here are some key resistance and support levels to monitor:

#### Support Levels
– The September low of $27.75 acts as a significant support level for silver. If the price falls below this level, it could test further support at $28.70 and $28.33[3].
– The 200-day Exponential Moving Average (EMA) around $29.06 is another crucial support level. Silver prices are currently wobbling around this EMA, suggesting uncertainty in the longer-term outlook[1][3].

#### Resistance Levels
– The immediate resistance level for silver is around $30.00. A decisive move above this level could propel silver toward resistance at $30.36–$31.69. This range is critical as it could determine the near-term trend for silver[3][4].
– The 50-day EMA around $30.90 serves as a barrier for any upward movement. Silver needs to break above this level to regain momentum[1].

### Market Indicators and Momentum

The Relative Strength Index (RSI) for silver is currently around 40.00, which is in neutral territory. This suggests there is room for momentum to build if suitable triggers emerge. The MACD momentum indicator, while showing some positive signs on the daily and weekly charts, indicates that the long-term bull market for silver remains intact but is not without its challenges[2][3].

### Supply and Demand Dynamics

Silver prices are also influenced by supply and demand dynamics. Despite the current price drop, the near-term outlook is cautiously bullish, supported by persistent supply deficits and growing industrial demand. The $29.73 level, which is the 200-day moving average, will be a critical technical level that could dictate the near-term price direction. A break higher could open the door for further gains, while failure to hold this level may see silver consolidate near $28.40[5].

In summary, the silver price drop to near $29.60 is a result of rising US bond yields and the anticipation of a gradual rate-cut cycle by the Federal Reserve. Traders and investors should closely monitor the key resistance and support levels, as well as the broader market indicators, to navigate the complexities of the silver market heading into 2025.