Silver Price Forecast: XAG/USD nears $58.00 amid US Dollar weakness

LONDON (December 1) Silver (XAG/USD) rallies further on Monday and is on track for a 15% appreciation over the last six trading days, after reaching fresh record highs at $57.88. Market expectations that the Federal Reserve (Fed) will further ease monetary policy next week and a mild risk-averse mood are boosting precious metals.

US macroeconomic data released after the US government shutdown and dovish comments by Fed officials have boosted market expectations of a quarter-point rate cut after the November 10 meeting. Apart from that, rumours that the White House economic adviser, Kevin Hassett, will replace Jerome Powell as the next Fed Chairman are feeding expectations of more interest rate cuts next year.

Technical Analysis: Next resistances are at $58,00 and $60.00

XAG/USD 4-Hour Chart

The technical picture remains positive, although the Relative Strength Index (RSI) has reached overbought levels at most timeframes, which should act as a warning for buyers. The 4-hour RSI is above 80.0, suggesting the possibility of a correction, but the fundamental background is underpinning speculative demand for precious metals.

Immediate resistance is at the 161.8% retracement of the mid-November pullback, around $58.00. Above here, the next upside target would be the $60.00 psychological level. The 261.8 Fibonacci retracement of the mentioned cycle is at $63.80.

On the downside, intraday support is at $56.45. A bearish reaction below that level might seek support at the previous record high, in the $54.45 area (November 13 high), ahead of the November 27 high, at $52.75.

FXStreet