Silver Price Forecast: XAG/USD consolidates below multi-year highs

LONDON (July 20) Silver (XAG/USD) is treading water on Friday, with spot prices hovering near $38.25 after marking a fresh 14-year high of $39.13 earlier this week. The metal continues to draw support from a firmly bullish structure, trading within a well-defined ascending channel on both the daily and weekly charts. While momentum has cooled slightly near multi-year highs, the broader technical outlook remains positive, with prices still comfortably positioned above key short-term moving averages.

The 21-day EMA at $37.05 continues to provide dynamic support, while the 50-day EMA near $35.82 offers a solid cushion for any deeper pullbacks.

Although price is consolidating just below the $38.50-$39.00 resistance zone, momentum indicators are beginning to turn higher again. The Relative Strength Index (RSI) eased slightly after nearing overbought territory earlier in the week when Silver hit its 14-year high. However, it has started to slope upward again, currently hovering around 66, pointing to a potential revival in buying interest.

The Average Directional Index (ADX) on the daily chart is also beginning to pick up, suggesting that trend strength may be strengthening after a brief slowdown. These developments indicate that the recent consolidation may be a healthy pause within the broader uptrend, rather than a signal of exhaustion.

Immediate support is seen around $37.00 round number, aligning with the 21-day EMA and marking a key line in the sand for bulls. A break below this level could trigger a deeper pullback, exposing the next support at $35.50, followed by a stronger demand zone near $34.50. On the upside, a sustained move above $39.13 would likely attract fresh buying interest, opening the door for a push toward the psychological $40.00 level and potentially higher.

FXStreet