On Wednesday, silver (XAG/USD) continued its upward trend, trading just below the round $90.00 level, rising 2.45% for the day. This precious metal continues to receive support from significant demand in Asia, despite the strengthening of the US dollar and rising Treasury yields—a factor that typically reduces the appeal of non-yielding assets.

The rise in silver prices comes amid ongoing geopolitical tensions in the Middle East, where US-Iran negotiations have stalled. Concerns about potential disruptions in energy supplies continue to fuel global inflationary pressures, which in turn increase investor interest in precious metals.

Recent US inflation data also strengthened expectations that the Federal Reserve may maintain a restrictive monetary policy for an extended period. In April, the Consumer Price Index (CPI) in the US rose to 3.8% year-on-year, the highest level since May 2023, while the Producer Price Index (PPI) increased by 6% over the same period. This trend is contributing to rising US Treasury yields, which supports the dollar. Despite unfavorable conditions for precious metals, silver is demonstrating remarkable resilience.

TD Securities strategists believe the main driver of the market is currently demand from China. The bank notes that leading traders on the Shanghai Futures Exchange (SHFE) continue to actively buy silver, and premiums in the Chinese market remain high.

Additionally, TD Securities emphasizes that there have been multiple opportunities for import arbitrage recently, indicating that Asian demand is driving silver prices higher, while systematic flows from commodity trading advisors are being ignored.

This high level of physical demand helps offset the negative impact of the strengthening US dollar and expectations that the Fed will keep interest rates elevated for an extended period.

From a technical perspective, the Relative Strength Index (RSI) has approached the overbought zone, suggesting a potential pullback. The current resistance is at the $90.00 round level, while the main support is the 100-day SMA. Oscillators are positive, confirming the bulls' advantage, and the 200-day SMA indicates long-term global growth.