Silver Price Forecast: XAG/USD remains weak, with upside attempts limited at $37.25

LONDON (July 31) Silver (XAG/USD) remains on the defensive on Thursday’s Early European session, licking its wounds after a 2.7% sell-off on Wednesday. The precious metal’s recovery attempts have been capped at $37.30, with bears aiming for a retest of Wednesday’s low, at $36.80.

Precious metals are on the back foot, weighed by a stronger US Dollar and a rebound in US yields following hawkish comments from Fed Powell, and strong US GDP and employment figures that endorse the central bank’s patient approach on monetary policy and curb hopes of near-term rate cuts.

Technical analysis: Silver breached a mid-term trendline support.

From a technical perspective, XAG/USD broke the ascending trendline support from April lows, suggesting that the bullish cycle has come to an end. The 4-hour RSI has reached strongly oversold levels, which often leads to a bullish correction, but, in the current context, rallies are likely to find sellers.

Immediate resistance lies at the mentioned $37.30 intra-day highs. The pair might extend its correction to retest previous support, at $37.95, or even the broken trendline, now at $38.80. Further correction looks unlikely right now.

To the downside, bears are likely to retest the mentioned $36.80 low, but there is little scope for further decline considering the pair’s oversold condition. Below here, the next potential targets are the July 9 low, at $36.30, and the June 24 and 29 lows, at $35.34.

FXStreet