Current Market Overview
As of February 18, 2026, silver (XAG/USD) is trading below its critical 50-day moving average (MA) at $80.87, following a record high of $121.67 reached on January 29. This situation opens the possibility for a test of the 200-day MA support level at $51.86.
Moving Averages Divergence
Throughout 2025, the 50-day and 200-day MAs moved in tandem, but currently, they are diverging by approximately $29. The 50-day MA is expected to start declining around April 10, marking a significant inflection point in the market.
Market Sentiment and Trading Behavior
Traders are currently in a "digestion" phase, focusing on finding value rather than chasing prices. The rejection of the 50-day MA as a value indicator has led to a shift in attention towards the 200-day MA. This indicates a potential prolonged period of consolidation as traders seek to work off the excesses from the rapid price increase in January.
Future Scenarios
Two potential scenarios are emerging for silver's price movement:
- Geopolitical Spike: A significant geopolitical event, particularly in the Middle East, could drive silver prices higher, similar to gold. However, buying interest may be limited due to silver's primary role as an industrial metal rather than a safe haven.
- Grind to Deep Value: Alternatively, traders may continue to sell into rallies, aiming for a deeper value area around the 200-day MA. This scenario may require a catalyst, such as a potential Fed rate cut, which could occur as early as June, to stimulate demand.
Conclusion
The silver market is currently in a critical phase, with traders awaiting a clearer signal to determine the next direction. The upcoming weeks will be crucial as the market digests the rapid price movements from January and seeks to establish a new support base.