Silver Price Forecast: XAG/USD rallies sharply, posts weekly gains of 3.5%

NEW YORK (August 9) Silver Price advances for the fourth time in the week, poised to end above $38.00 a troy ounce and close to weekly highs of $38.50 as traders prepare for the weekend. Broad US Dollar weakness across the board and increasing bets that the Federal Reserve might reduce rates at the September meeting, supported the grey metal advance.

XAG/USD trades with daily gains of 0.24%, set to end the week up by more than 3.50%.

XAG/USD Price Forecast: Technical outlook

XAG/USD sits $1.50 shy of resting the yearly high after retreating below the 20-day Simple Moving Average (SMA) to test the 50-day SMA at 36.20 on July 31.

Since then, Silver has rallied more than 6%, sparked by the formation of a ‘bullish harami,’ confirmed by the crucial breach of the July 31 high of $37.26. The grey metal climbed sharply and cleared the 20-day SMA at $38.06, further cementing its upward bias.

However, buyers need to breach the $39.00 so they can test the YTD high of $39.52, before challenging $40.00. On the flip side, although momentum is bullish, confirmed by price action and the Relative Strength Index (RSI), traders could not price out a reversal.

If Silver dives below the 20-day SMA and $38.00, then sellers could pile on to push prices toward $37.00, aimed to test the 50-day SMA at $36.85.

FXStreet