Silver price soared past $36.90, marking a confirmed breakout of a bullish flag pattern. Right now, the metal is aiming for higher prices because of the strong demand from investors looking for a safe-haven. Interest rate policy from the Federal Reserve may also have an impact on market direction. Even though technical indicators indicate strong momentum, short-term corrections are still possible.
Geopolitical Risks Push Silver Price Into Focus
The ongoing tensions in the Middle East have fueled demand for safe havens worldwide. Investor interest in metals is rising as regional instability rises. The Israel-Iran conflict is heating up, and signs that the US may join the fray are exacerbating risk-off sentiment. Precious metals like gold and silver are frequently used by traders during these erratic times.
The recent rally has been supported by this geopolitical scene. The silver price surpassed the crucial $36.90 level, confirming a bullish flag breakout pattern. Therefore, this technical configuration points to further gains, especially if tensions keep rising.
Fed Uncertainty Fuels Bullish Silver Pattern
Although everyone is watching the Fed’s forecast, it is anticipated that rates will remain unchanged. Their predictions may have an indirect effect on the price of silver by affecting the US dollar. Furthermore, a dovish tone could devalue the dollar and increase the price of precious metals.
According to technical analysis, silver emerged from a descending channel on the 4-hour chart. This confirms that the correction from June 9 has ended. The next level of resistance is $37.85, which corresponds to the Fibonacci extension level of 161.8%.
If the rally continues, the next price range to watch is $39.35-$39.55. These objectives align with the 261.8% extension and the bullish flag pattern’s measured projection. Short-term pullbacks are possible as the RSI approaches overbought levels.
Gold-Silver Trends Guide Smart Investor Moves
To determine relative value, traders frequently examine the gold-to-silver ratio. A greater ratio can indicate that silver is cheap. At the moment, this ratio is making some people prefer silver as it tries to catch up to gold. Due to their status as safe havens, gold and silver prices usually move in tandem.
Additionally, gold prices have been rising. Given that silver frequently follows gold’s lead, silver’s future movement will be greatly influenced by gold’s. Consequently, investors can use both metals as hedges when the economy is uncertain.
Investor sentiment has been strong recently. The market is probably going to favor more upside as long as demand for safe havens continues. Additionally, it is anticipated that pullbacks will be brief and utilized as opportunities for purchases.
Silver Sentiment Remains Bullish
The silver (XAG/USD) price may consolidate slightly before targeting the next resistance at $37.85. The market could rise quickly toward the $39.55 target if this level breaks. Although traders should keep an eye on the RSI and volume for indications of exhaustion, the technical momentum is strong.
Geopolitical events and Federal Reserve guidance will continue to be crucial in the future. Additionally, demand for silver may increase if risks increase or rate expectations change due to safe-haven concerns. On the downside, $36.90 and $36.50 are important supports that could avert significant corrections.
Bottom Line
Silver is back in the spotlight as the bullish flag breakout coincides with global risk events and market expectations. Given that safe-haven demand is not slowing down, and gold-silver dynamics favor further upside. Moreover, growing demand for precious metals indicates that cautious investors will keep coming in. The next major resistance is still in sight, according to technical patterns. Thus, as long as uncertainty exists, silver might remain one of the best-performing assets in the short term.
About The Author
