• Silver enters a bullish consolidation phase during the Asian session on Wednesday.
• A slightly overbought daily RSI holds back the XAG/USD bulls from placing fresh bets.
• Any corrective pullback might be seen as a buying opportunity and remain limited.

Silver (XAG/USD) is seen consolidating the previous day’s strong gains to its highest level since February 2012 and oscillating in a narrow range during the Asian session on Wednesday. The white metal currently trades just above the $37.00 round figure and seems poised to prolong the recent well-established uptrend from the April monthly swing low.

From a technical perspective, the overnight breakout through a short-term descending trend channel, which constituted the formation of a bullish flag pattern, and the subsequent move up validate the constructive outlook. However, a slightly overbought Relative Strength Index (RSI) on the daily chart warrants some caution. Hence, it will be prudent to wait for some near-term consolidation or a modest pullback before placing fresh bullish bets around the XAG/USD and positioning for further gains.

That said, any corrective slide is more likely to attract fresh buyers and remain limited near the ascending channel resistance breakpoint, around the $36.90-$36.85 region. A convincing break below, however, might prompt some technical selling and drag the XAG/USD further towards the $36.40-$36.35 horizontal support en route to sub-$36.00 levels, or the weekly low. The latter should act as a key pivotal point, which if broken could pave the way for some meaningful downside in the near term.

Nevertheless, the XAG/USD seems poised to climb further toward testing the February 2012 swing high, around mid-$37.00s. Some follow-through buying should allow the XAG/USD to aim toward reclaiming the $38.00 round figure. The momentum could extend further toward the next relevant hurdle near the $38.50-$38.55 region.

Silver 4-hour chart

• Silver price may find immediate resistance at $36.89, the highest since February 2012.
• The 14-day Relative Strength Index remains below the 70 level, indicating a persistent bullish bias.
• The ascending channel’s lower boundary around $36.10 acts as the immediate support.

Silver price (XAG/USD) retraces its recent gains registered in the previous session, trading around $36.30 per troy ounce during the Asian hours on Friday. A bullish bias is prevailing as the technical analysis of the daily chart shows the price of the precious metal remains within an ascending channel pattern.

The Silver price is remaining above the nine-day Exponential Moving Average (EMA), further highlighting that the short-term momentum is stronger. Additionally, the 14-day Relative Strength Index (RSI) hovers slightly below the 70 level after retreating from higher levels, indicating a prevailing bullish bias while also suggesting the potential for a continued downward correction.

The XAG/USD pair may test the immediate barrier at $36.89, the highest since February 2012. A break above this level may strengthen the bullish bias and support the pair to approach the upper boundary of the ascending channel around $38.50.

Silver price is testing the ascending channel’s lower boundary around $36.10, followed by the nine-day EMA at $35.77. A break below this crucial support zone could weaken the short-term price momentum and put downward pressure on the 50-day EMA at $33.74.

A successful breach below the 50-day EMA could dampen the medium-term price momentum and prompt the price of the precious metal to navigate the region around the two-month low at $31.65, which was recorded on May 15.

XAG/USD: Daily Chart

AirBNB’s stock price (ABNB) rose in latest intraday trading and attacked the current resistance of $139.85, while trading alongside the upward correctional trend line in the short term, with ongoing positive pressure due to trading above the 50-day SMA, countered with negative signals from the Stochastic after reaching overbought levels, hindering upcoming gains. 

Therefore we expect more gains for the price, especially if the aforementioned resistance of $139.85 is breached, targeting the next one at $148.65.

Today’s price forecast: Bullish

XAU/USD Current price: $3,383.60

• US President Donald Trump says patience with Iran “wearing thin.”
• United States data came in below expected as markets gear up for the Fed.
• XAU/USD trades within a well-limited range amid renewed risk aversion.

Spot Gold set a weekly low of $3,366.25 on Tuesday, bouncing from the level yet in the American session. The US Dollar (USD) spent the first half of the day on the back foot, but remained within familiar levels as market players awaited United States (US) macroeconomic figures, while being cautious amid the Middle East crisis.

The US published May Retail Sales, which fell by 0.9% on a monthly basis, worse than the -0.1% posted in April and the -0,7% expected. Additionally, Industrial Production in the same period was down by 0.2% against the 0.1% advance anticipated. Finally, Capacity Utilization stood at 77.4%, down from the 77.7% posted in April and missing the 77.7% expected.

Additionally, trade-war-related headlines kept coming. On the one hand, European Commission President Ursula von der Leyen noted trade talks with the US are “advancing” despite being complex, while adding the EU has a trade surplus with the US, and that could last.”

Finally, it is worth adding comments from the US President about the Middle East conflict, which fueled risk-off, helping XAU/USD trim intraday losses. Trump claimed the US military has full control of the Iranian airspace, adding that US patience “is wearing thin.”

Discouraging US data and renewed Middle-East-related concerns fuel demand for safety.

In the meantime, the US Federal Reserve (Fed) is expected to keep interest rates on hold when it announces its monetary policy decision on Wednesday. US officials will also present a fresh Summary of Economic Projections (SEP), with fresh inflation, growth and employment perspectives.

XAU/USD short-term technical outlook

The XAU/USD pair trades in the $3,380 region, and the daily chart shows it has spent the journey confined to a tight range. The pair has lost its positive momentum, but the overall risk skews to the upside, given that technical indicators have turned flat well above their midlines. Additionally, XAU/USD develops above all its moving averages, with the 20 Simple Moving Average (SMA) partially losing its bullish strength, yet holding far above bullish 100 and 200 SMAs.

In the near term, and according to the 4-hour chart, Gold price has room to ease further. The pair trades below its 20 SMA, which caps advances at around $3,406.90. The 100 and 200 SMAs remain directionless below the current level, while technical indicators grind lower within negative levels. Still, the risk-averse environment will likely prevent the pair from falling further.

Support levels: 3,366.10 3,352.40 3,339.75

Resistance levels: 3,406.90 3,414.60 3,437.85