Silver (XAG/USD) ended a three-day losing streak on Thursday, rising 3.38% to trade around $60.30, supported by a mildly weaker US Dollar and a pullback in US Treasury yields [1]. Despite this intraday rebound, the metal continues to exhibit a bearish structure, characterized by a series of lower highs and lower lows since mid-May [1]. Silver remains below its key moving averages, trading about 50% under its record high near $121 set in January [1].
The upside for silver is limited by macroeconomic headwinds, including renewed hostilities in the Middle East that have revived concerns over energy-driven inflation. These developments reinforce expectations that the Federal Reserve may need to raise interest rates, which typically weighs on non-yielding assets like silver as they become less attractive compared to interest-bearing investments [1]. The US Dollar Index (DXY) is trading around 100.94 after touching an intraday low of 100.79, with hawkish Fed expectations and geopolitical tensions expected to keep downside pressure on the US Dollar limited [1].
From a technical perspective, XAG/USD maintains a bearish near-term bias, trading within a downward parallel channel and below both the 200-day Simple Moving Average (SMA) at $70.25 and the 100-day SMA at $74.32 [1]. The price is just under the channel top at $63.50, indicating that upside attempts are currently capped. The Relative Strength Index (RSI) is around 41, signaling subdued momentum, while the MACD turning positive hints at only a modest recovery attempt within a broader corrective structure [1].
Key resistance is identified at the channel upper boundary near $63.50, with further resistance at the 200-day SMA ($70.25) and 100-day SMA ($74.32) if a sustained breakout occurs. On the downside, initial support is at $55, with stronger demand expected near the channel floor at $45 should bearish pressure resume [1].
CONCLUSION
Silver's recent rebound has not altered its overall bearish technical outlook, as macroeconomic and geopolitical factors continue to cap upside potential. Unless XAG/USD can break above key resistance levels, the market is likely to remain cautious, with downside risks persisting in the near term.