Silver prices (XAG/USD) plunged to near $29.00 during Friday’s American session, primarily driven by a lackluster fiscal stimulus package from China’s third plenum meeting. Investors had anticipated bolder measures to address the country’s economic challenges, but the focus on “high-quality development” disappointed market participants.

The absence of substantial measures to boost industrial output weighed heavily on silver prices, as the precious metal is widely used in various sectors, including electric vehicles, medical devices, and consumer durables.

Additionally, a sharp rebound in the US Dollar Index (DXY) to near 104.30, fueled by growing speculation of a Donald Trump victory in the upcoming US presidential elections, further dampened silver’s appeal. A stronger dollar makes silver more expensive for investors holding other currencies.

However, expectations of interest rate cuts by the Federal Reserve starting in September could provide some support for silver prices. Cooling inflation and easing labor market conditions have reinforced these expectations.

From a technical perspective, silver prices have breached a key upward-sloping trendline and are now trading below the 20- and 50-day Exponential Moving Averages, indicating a bearish turn in the near-term trend. The 4 December 2023 high at $25.90 could act as a major support zone for the silver price. The 14-day Relative Strength Index (RSI) suggests a sideways trend for the time being.