Silver Jumps 4.7% to $90 as Breakout Targets $95 Resistance Zone
Silver prices keep climbing - XAG/USD is now trading near $90.16, a gain of close to 4.7% in the last few sessions...
Quick overview
- Silver prices have surged to around $90.16, reflecting a 4.7% increase amid expectations of potential US interest rate cuts.
- The weakening US dollar has made silver more attractive to global buyers, contributing to its recent price gains.
- Technically, silver has broken through key resistance levels, indicating a bullish market sentiment and strong follow-through buying.
- As long as silver remains above the $85-$86 range, the outlook remains positive, with potential targets near $95.00.
Silver prices keep climbing – XAG/USD is now trading near $90.16, a gain of close to 4.7% in the last few sessions. This latest move is a reflection of a broader shift in market expectations as investors are now pricing in potential US interest rate cuts following the recent cooling inflation data. With yields easing and the dollar softening, silver has managed to pick up some pace alongside gold.
The overall picture remains pretty supportive. Those softer US inflation readings have taken the pressure off the Federal Reserve to keep policy tight & as a result precious metals are in greater demand. Silver benefits from both declining real rates & an improvement in risk appetite – it’s a metal with a foot in both camps, after all.
Dollar weakness keeps metals firmly in focus
The US Dollar Index is hovering pretty close to 99.10 at the moment which has given silver a bit of a boost. When the dollar is weaker, it tends to make precious metals more attractive to buyers all around the world because it lowers the cost for them – & silver has responded in a pretty big way compared to gold because it’s more volatile.
Right now markets are all focused on US Retail Sales and Producer Price Index (PPI) data. If those numbers are stronger than expected then that could give the dollar a slight boost for a bit – but if they are softer then it’s likely to keep silver on its current trend. As things stand, positioning remains pretty tilted towards metals because traders are expecting a more accommodating policy environment.
Silver has finally broken through its recent structure & its momentum is building
From a technical point of view, silver’s structure has really improved on the 2-hour chart. Price has broken above that trendline that was capping its rises right through late December, which confirms that there’s a more bullish mood among the market right now. Recent candlesticks show some really strong bullish closes with some pretty limited upper wicks, which suggests that there’s some real follow-through buying going on rather than just people covering their short positions.
- Currently, price is still above that former resistance at $85.94, which is now acting as support
- Our next level of resistance comes in near $91.55 & then $95.68
- We also have a rising trendline support coming in near $82.80, with a deeper level of support at $78.65
- The RSI is sitting around 67 & while it’s still below the overbought levels, it is trending higher
The breakout has also got silver in line with a rising channel, which reinforces the view that any pullbacks are likely to be pretty shallow as long as the momentum isn’t too sharply fading.
Silver outlook: it can stay above $86
As long as silver stays above the $85-$86 zone the broader technical bias is going to remain pretty constructive. If it can manage to get a sustained move above $91.50 then it’s likely to be off to the mid $90s – but if it breaks back below $82.80 then it would be weakening the bullish structure.
Trade idea: Buy at around $86.00, stop below $82.80, looking to target $95.00.
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