Silver Price Eyes $39 as Gold Breaks Out—Can Bulls Ride the Dollar Weakness?
Silver (XAG/USD) is riding gold’s coattails as safe-haven demand increases with a weakening US dollar and rising trade tensions.
Quick overview
- Silver (XAG/USD) is benefiting from increased safe-haven demand due to a weakening US dollar and rising trade tensions.
- The price has broken above key Fibonacci levels, with bullish momentum supported by macroeconomic factors and technical indicators.
- Traders are cautiously optimistic, anticipating that potential new tariffs could drive further inflows into silver and gold.
- The outlook remains bullish as long as silver holds above $38.46, with targets set at $39.13 and $40.00.
Silver (XAG/USD) is riding gold’s coattails as safe-haven demand increases with a weakening US dollar and rising trade tensions. It’s trading at $38.52 after bouncing off key Fibonacci levels, with renewed bullishness driven by macro and technical factors.
Gold’s move above $3,373 has set the tone for precious metals as investors hedge against dollar weakness and geopolitical uncertainty. As we’ve seen in recent Reuters coverage, traders are getting cautious ahead of the August 1 tariff deadline. If the US goes ahead with new tariffs on Chinese and European goods, silver (like gold) could see more inflows as investors seek protection from trade volatility.
Plus, slowing global growth and signs the Fed may not hike are supporting metals. With inflation softening and rate cut talk resurfacing, non-yielding assets like silver are still attractive. Silver also has the dual benefit of being a monetary and industrial metal, and with cooling Treasury yields and potential manufacturing resilience, it’s getting an extra boost.
Silver Technical Break Holds Above $38.46
On the technicals, silver has broken above the 23.6% Fibonacci level at $38.46 and is now testing short-term resistance in a rising trend channel. The 50-period Simple Moving Average (SMA) at $38.04 is still support. Price has respected the trendline from the $36.27 low, so the structure is still bullish.
The Relative Strength Index (RSI) is at 66.61, so momentum is increasing. Not yet overbought, but approaching 70, a level that historically means short-term pullbacks or consolidation. But in strong trends, 70 often precedes continued rallies rather than immediate corrections—especially when the macro trend is a weakening dollar.
If bulls hold above $38.46, next targets are $39.13 and $40.00. Below $38.04 and it may retest the 38.2% and 50% Fibs at $38.04 and $37.70 respectively.
Key Levels:
- Immediate Resistance: $38.52, $39.13* Support: $38.04, $37.70, $37.36
- RSI: 66.61 (bullish but getting overbought)
Silver Outlook: Bullish But Cautious
Silver’s short-term direction will be driven by macro headlines. If new tariffs are confirmed, safe-haven demand will increase and both gold and silver will rise. If the Fed is dovish and inflation is soft, it will be a tailwind for XAG/USD to go higher.
For now, traders are cautiously bullish. The technical break is holding, momentum is strong and the macro is supportive of more upside. But volume and follow-through above $38.52 will be key to sustain the rally to $39–$40.
Unless the dollar has a surprise comeback or the Fed turns hawkish, silver’s path of least resistance is up—at least for now.
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