Silver (XAG/USD) has demonstrated a strong performance recently, continuing its bullish trend despite minor consolidations. The precious metal closed last week at a record $38.87, maintaining its upward trajectory and holding trend support. As silver remains well-positioned above key technical levels, the outlook remains positive, with the $39.53 resistance level in focus.
Weekly Breakout Extends Bullish Bias
Silver experienced impressive gains last week, reaching a four-week high of $39.06 before closing at $38.87, marking its highest weekly closing ever. Monday’s trading session saw a modest pullback, with the price dipping to $38.04 but maintaining a strong range within the top half of Friday’s trading. This movement indicates that the buyers remain firmly in control, and the upward trend remains intact.
Notably, silver’s rally followed a successful back-test of support at the rising 20-Day moving average, now positioned at $37.89. This level has proven to be a reliable short-term dynamic support for the precious metal, confirming the continuation of the uptrend. The recovery from this support underscores the strength of the prevailing bullish momentum.
Trend Structure Intact Above Key Averages
Friday’s breakout was particularly significant, pushing silver past the previous swing high at $38.74, which keeps the price within its rising trend channel. The trend channel has been respected since late July, and recent pullbacks have tested key technical levels. A notable test occurred at $36.96, where both the lower channel line and the 50-Day moving average held firm. This strengthens the case for continued upward momentum as long as silver remains above the 50-Day moving average, currently at $37.10.
The 50-Day moving average has already supported two significant swing lows: one in early August and the other at the most recent trough, further solidifying its role as a critical medium-term trend support. As long as silver stays above this level, the broader uptrend is likely to persist, allowing the price to move higher in the near future.
Near-Term Targets and Resistance Levels
As silver consolidates near recent highs, traders will focus on the $39.53 resistance level, which corresponds to the July high. A decisive breakout above this level would confirm the continuation of the bullish trend, signaling that silver is likely to push further toward the upper bounds of its rising trend channel.
However, silver faces potential resistance near the top of the channel. In July, the price approached this upper boundary twice but faced resistance both times, triggering short-term corrections. A similar reaction could occur if silver encounters resistance near this level again. Nonetheless, if silver manages to break above the $39.53 level, the outlook remains strongly bullish, with the price potentially surging to higher levels.
Channel Top Could Define Next Move
Silver is currently in a constructive technical position, having broken out above interim resistance levels and successfully retested key dynamic support. This sets the stage for continued consolidation near recent highs, with the next major price action likely to come from how silver behaves near the channel’s top.
A clean breakout above the upper boundary of the channel would signal accelerating momentum and could trigger a new leg higher in the price of silver. On the other hand, if silver faces another rejection at this level, it could experience a corrective retracement, possibly back toward the 50-Day moving average. Traders should closely monitor price action around the channel top for signals of either continued bullish momentum or a potential pullback.
Long-Term Outlook for Silver
The broader outlook for silver remains bullish, with the metal showing consistent strength in both the short-term and medium-term charts. As long as silver holds above its key moving averages and continues to respect its trend channel, the outlook for further gains remains intact. The focus remains on the $39.53 resistance level, and a breakout above this point could open the path toward higher targets.
Silver’s continued bullish bias is supported by fundamental factors such as increased demand from the renewable energy sector, especially for its use in solar panels, as well as continued uncertainty in global markets, which benefits safe-haven assets like silver. With a supportive technical structure and a favorable macroeconomic backdrop, silver’s price could continue to rise, with the $42 level being a key target for the longer-term forecast.
In conclusion, silver is in a strong position to maintain its bullish trend, with the key near-term resistance at $39.53 standing as the next hurdle. A breakout above this level could open the door for silver to challenge new highs, while any rejection could lead to a short-term correction. Regardless of the near-term fluctuations, the medium- to long-term outlook remains positive, and silver investors will likely continue to benefit from the overall uptrend as the broader economic uncertainty persists.
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