Silver prices held steady on Friday, consolidating after Thursday’s strong breakout. While the metal remains below recent highs, technical support levels suggest the bullish trend is intact. With gold rallying past $3,000 on safe-haven demand and central bank accumulation, silver is expected to follow suit, benefiting from similar macroeconomic factors.
At 16:27 GMT, XAG/USD is trading $33.67, down $0.20 or -0.58%.
Silver is currently trading above key support at $33.39, with additional levels at $32.53 and $31.81. The most critical support sits at the 50-day moving average of $31.59, a level that has consistently provided a floor for the market. As long as silver remains above these levels, the bullish trend remains in play.
On the upside, there is substantial room for further gains, with the next major resistance zone between $34.87 and $35.40. A move past this range could trigger additional momentum buying, potentially setting up a retest of multi-year highs.
Gold’s rally past $3,000 underscores a strong demand for precious metals in response to global economic uncertainty. Central banks, particularly China, have been aggressively increasing gold reserves, signaling a shift away from the U.S. dollar. This trend supports silver as well, given its dual role as both an industrial and monetary asset.
Additionally, expectations of a more accommodative Federal Reserve have fueled a weaker dollar, further supporting precious metals. Traders are pricing in rate cuts later this year, which would enhance silver’s appeal as a hedge against currency devaluation.
Silver’s recent consolidation suggests a pause rather than a reversal. If prices remain above $33.39, buyers could push the market toward the next major resistance at $34.87-$35.40. Given the ongoing strength in gold, safe-haven demand, and the Fed’s dovish stance, silver is likely to maintain its upward trend.
Traders should watch for any sustained move above $35.40, which could open the door for a more aggressive rally. Conversely, a break below $31.59 would be an early warning of trend weakness. For now, the outlook remains bullish, with further gains expected in the near term.
More Information in our Economic Calendar.
James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.