Silver Price Forecast: XAG/USD rallies to $47.00 with US Government shutdown looming

LONDON (September 29) Silver (XAG/USD) continues to rise on Monday. The white metal appreciates by about 1.8% on the day, and trades as the US Dollar and US Treasury yields retreat, with investors taking positions ahead of the $46.95, after having hit fresh multi-year highs at $47.18 in the early European trading session.

Precious metals are thriving on Monday, as the US Dollar and US Treasury yields retreat, with investors taking positions ahead of the highly likely closure of the US federal government on Wednesday.

Beyond that, the moderate US PCE Price Index figures seen on Friday keep concerns of a sharp inflationary impact from tariffs subdued, at least for now, and keep hopes of back-to-back Fed rate cuts alive. This is another source of weakness for US yields and the US Dollar.

Technical Analysis: Silver reaches extremely overbought levels

Fundamental drivers continue to boost Silver higher, but technical indicators indicate extremely overbought levels, which should serve as a warning for buyers. The pair has rallied nearly 7% in the last three trading days and about 13% in the last two weeks. Such sharp rallies tend to have similar corrections.

On the upside, the intraday high, around the $47.20 area, might offer some resistance. Above here, a Fibonacci tool sho¡ws the 261.8% extension of the mid-September bullish run, at $47.70.

A bearish reaction from current levels might find support at the $45.96 intraday lows ahead of the previous long-term highs, at $45.30 (September 25 high) and $44.45 (September 23 high).

FXStreet