Silver Price Surges 8% to $39.12 Before Cooling—Can Bulls Defend $38 Zone?
Silver (XAG/USD) made waves last week, touching $39.12, its highest level since 2021, before easing slightly to $38.30.
Quick overview
- Silver (XAG/USD) reached $39.12 last week, its highest since 2021, before settling at $38.30 due to strong industrial demand and supply deficits.
- WisdomTree strategist Nitesh Shah highlighted that silver's fundamentals remain robust, driven by clean tech demand and lagging mining output.
- Technical analysis shows $38.45 as a key resistance level, with potential bullish continuation if surpassed, while a drop below $38.04 could indicate a deeper pullback.
- The market outlook for silver remains neutral-to-bullish, influenced by macroeconomic factors and upcoming CPI and PPI data that could impact its performance.
Silver (XAG/USD) made waves last week, touching $39.12, its highest level since 2021, before easing slightly to $38.30. The sharp rally—over 8% in five days—was driven by mounting supply deficits and a surge in industrial demand, especially from the booming solar sector.
According to WisdomTree strategist Nitesh Shah, the market isn’t just riding momentum. “Silver’s fundamentals remain firm. We’re seeing strong demand in clean tech, while mining output hasn’t caught up,” Shah noted. These supply-demand imbalances are being closely watched by institutional players, particularly as silver gains attention as a more affordable alternative to gold.
The metal’s performance is starting to catch up with gold, narrowing the gold-to-silver ratio to under 86, a signal that silver could continue gaining traction if macroeconomic conditions align.
Silver Technical Picture: $38.45 Acts as Key Pivot
Silver’s rally cooled as price tested resistance at the 23.6% Fibonacci retracement level near $38.45. The pullback appears technical in nature, with the Relative Strength Index (RSI) cooling to 62.98, down from overbought levels above 73.
Here are the key technical levels to monitor:
- Immediate Resistance:
- $38.45 (23.6% Fib level)
- $39.12 (2024 high)
- $39.58 (2021 swing high)
- Support Zones:
- $38.04 (38.2% Fib)
- $37.70–$37.36 (50%–61.8% retracement)
- $37.12 (50-SMA, 78.6% Fib)
While momentum is still positive, the failure to reclaim $38.45 could signal a broader pullback. Conversely, a clean breakout above that level would reassert bullish control and set the stage for another push toward $39.58.
July 15–19 Outlook: Bullish Bias, But Caution Ahead
Silver enters the week with a neutral-to-bullish bias, but traders should be alert for signs of trend exhaustion. The broader metals market remains influenced by gold, which is currently consolidating just below its own key breakout zone near $3,375. Additionally, the U.S. dollar index (DXY) has strengthened slightly, applying modest pressure on precious metals.
What could influence silver’s next move:
- Break above $38.45 → bullish continuation to $39.12 and $39.58
- Break below $38.04 → opens deeper retracement toward $37.36–$37.12
- RSI drop below 60 → suggests momentum shift to the downside
Fundamentally, silver still shines in this uncertain environment. Inflation uncertainty, President Trump’s tariff threats, and dovish Fed expectations all support the case for non-yielding assets like gold and silver. But with CPI and PPI data on deck, any hawkish surprises could test silver’s staying power.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save