Silver Price Forecast: XAG/USD Faces $36.41 Rejection Amid Fed Shake-Up
Silver (XAG/USD) is facing a key technical test after a sharp rally took prices up to $36.41, just below a descending trendline...
Quick overview
- Silver (XAG/USD) is testing a critical resistance level at $36.41 after a strong rally, influenced by a weaker U.S. dollar and speculation about potential changes in Federal Reserve leadership.
- Recent comments from Donald Trump regarding Jerome Powell have contributed to market volatility, pushing the dollar to its lowest level since March 2022 and boosting silver demand.
- Despite recent gains, silver faces selling pressure at $36.41, and a failure to break this level could lead to a short-term pullback towards support levels at $36.06 or $35.71.
- Traders should monitor upcoming U.S. GDP data and PCE inflation reports, as these could significantly impact expectations for the Fed's rate trajectory and silver prices.
Silver (XAG/USD) is facing a key technical test after a sharp rally took prices up to $36.41, just below a descending trendline from the mid-June highs. The metal has been riding a wave of bullish momentum, supported by a weaker U.S. dollar and renewed speculation over Federal Reserve leadership changes if Donald Trump wins the upcoming U.S. election.
Trump’s latest remarks calling Jerome Powell “terrible” and hinting at replacing the Fed Chair have rattled markets. The dollar dropped to its lowest level since March 2022, giving silver a lift as investors turned to alternatives to the greenback. A weaker dollar typically boosts demand for silver by making it cheaper for non-U.S. buyers.
Still, XAG/USD faces stiff resistance at this level. The most recent 2-hour candle formed a long upper wick, a sign of selling pressure at $36.41. It’s the fourth touch of this descending trendline—making it a key barrier to watch.
Silver Price Forecast: Technical Outlook
Despite strong gains from the $35.48 swing low, XAG/USD is at risk of a short-term pullback if bulls fail to break $36.41 with conviction.
Key Technical Levels:
- Resistance: $36.41 (trendline + horizontal resistance)
- Support: $36.06 and $35.71
- EMA Check: Price is holding above the 50-EMA ($36.14), showing near-term strength
- MACD Status: Momentum remains positive but shows signs of flattening, suggesting the rally may be losing steam
If price clears $36.42 on a 2-hour close with volume, XAG/USD could target $36.68 and $36.99 next. Conversely, a rejection may bring a retracement toward $36.06 or even $35.71.
What Traders Should Watch
The silver (XAG/USD) price forecast stays closely connected to broader macro developments. Markets are eyeing upcoming U.S. GDP data and Friday’s PCE inflation report. Both releases could shift expectations for the Fed’s rate trajectory.
Meanwhile, the geopolitical backdrop has eased with a tentative Israel-Iran ceasefire, but political risk remains elevated. If Trump signals a more dovish Fed appointment in coming weeks, it could keep downward pressure on the dollar—supporting silver’s longer-term trend.
Trade Scenarios for XAG/USD:
- Breakout Long: Enter on 2H close above $36.42
- Targets: $36.68 and $36.99
- Stop-loss: Below $36.06
- Pullback Setup: Buy near $36.06 on bullish candlestick confirmation
- Bearish Rejection: Short on rejection below $36.14, target $35.71
With momentum slowing but structure intact, the silver price forecast hinges on whether bulls can flip $36.41 into support.
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