Silver: XAG/USD breaches the long-term high at $37.30, supported by risk aversion

LONDON (July 11) Silver (XAG/USD) extends gains for the second consecutive day on Friday, supported by a mild risk-averse sentiment, after Trump announced a new batch of levies and hiked baseline tariffs to all other countries to 15% or 20% from the initial 10%.

The US president brushed concerns about inflation and rattled markets by applying tariffs of 35% on Canadian products and announcing a letter to the European Union, casting doubt on the progress of the trade talks and increasing uncertainty about the global trade outlook. Markets have reacted with risk aversion, dumping equities and boosting safe assets like precious metals.

Technical Analysis: Above $37.30, the next target is $37.65

Silver bounced up at the bottom of the ascending channel from June 24 lows on Thursday and is now testing the top of the last six weeks’ trading range, at $37.30, which is also a 12-year high.

The 4-Hour Relative Strength Index is close, but not yet at overbought levels, and the fundamental background remains supportive. With this in mind, a retest of the channel resistance, now at $37.65, looks like a plausible target before a consolidation or a downside correction takes place.

On the downside, immediate support is at the $36.95 intra-day low and July 8 highs, ahead of the channel bottom, now at $36.45, and the July 9 low at $36.15.

FXStreet