Silver Pops 7% From July Lows: Can Bulls Push Past $38.29 Resistance?
Silver (XAG/USD) has risen over 7% from the July 31 low of $35.78 and has reclaimed the major descending trendline...
Quick overview
- Silver (XAG/USD) has increased over 7% since July 31, reclaiming key technical levels including the major descending trendline and the 50-period SMA.
- The current price of silver is $37.86, just below the resistance zone of $38.29, with bullish momentum indicated by a positive RSI and candle structure.
- Investors are cautious due to potential changes in Fed leadership and rising global trade tensions, which are driving demand for safe-haven assets like silver.
- A technical trade setup suggests an entry at $37.65 with a target of $38.29, while a break above this level could lead to further gains.
Silver (XAG/USD) has risen over 7% from the July 31 low of $35.78 and has reclaimed the major descending trendline and the 50-period SMA at $37.64. This is similar to the recent gold rally, as the US dollar has softened and there is speculation about Fed leadership changes. With President Trump expected to announce replacements for the Fed chair and outgoing Governor Adriana Kugler, the markets are being cautious.
The dollar index (DXY) rose on Wednesday but is still range-bound. While gold reacted to this, silver held its ground better. Investors are navigating multiple crosscurrents – US interest rate cuts (now 87% probability for September via (CME FedWatch) and rising global trade tensions. Trump’s tariff threat against India over its Russian oil imports is one of the many risks driving safe-haven demand for precious metals.
Bullish Technical Signals
Silver is in a bullish phase after reclaiming the trendline resistance and entering an ascending price channel. The current price of $37.86 is just below the resistance zone of $38.29 which is aligned with the previous high and Fibonacci confluence.
Momentum is positive:
- RSI is at 62.9, not overbought
- 50-SMA support was reclaimed and held after the sharp drop in late July
- Candle structure shows small-bodied candles with upper wicks, no strong rejection near resistance
As long as bulls hold $37.64, the setup is for a move to $38.29 and $38.74. Below that, the 50-SMA and the trendline converge at $37.44 – an area to watch for pullbacks.
Trade Setup: Breakout Retest
Silver’s structure offers a clean technical trade for trend followers. Here’s the setup:
- Entry: $37.65 (retest of 50-SMA and trendline confluence)
- Stop-Loss: $37.44 (below structure and rising support)
- Take Profit 1: $38.29 (resistance zone)
- Take Profit 2: $38.74 (next high)
This setup relies on price to confirm the bounce from the newly reclaimed support. If silver breaks and closes above $38.29 with volume, expect a move to $39.18 next.
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