- Silver maintains its upward trend, influenced by the weakening US dollar, reaching a four-year peak at $47.00.
- Investor unease about a potential US government shutdown is further driving up demand for precious metals.
- XAG/USD is currently at an overbought level after climbing about 7% in just three days.
On Monday, silver (XAG/USD) continues its ascent, appreciating by approximately 1.8% during the day. This rise follows a retreat of the US dollar and Treasury yields, with investors positioning themselves below $46.95 after hitting a peak of $47.18 in early European trading.
The momentum in precious metals, particularly silver, is significant today. The retreat of the US dollar and Treasury yields seems to overshadow concerns regarding a possible US federal government closure looming on Wednesday.
Furthermore, last Friday’s mid-sized US PCE price index figures continue to fuel worries about the effects of inflation exacerbated by recent tariffs. There’s also a glimmer of hope for consecutive rate cuts from the Fed, adding to the pressure on US yields and the dollar.
Technical Analysis: Silver Approaches Overbought Territory
While the primary drivers push silver prices higher, technical indicators indicate an overbought status, which should be a cautionary signal for potential buyers. Over the past three trading days, silver has surged nearly 7%, and it has gained around 13% over the last fortnight—a rapid ascent that often leads to corrections.
On the way up, intraday highs near $47.20 could present some resistance. If it manages to surmount that, the Fibonacci tool points to a potential 261.8% extension from its bullish trend, reaching $47.70.
A downward move from current levels might encounter support at a low of $45.96, $45.30 from September 25, and $44.45 from September 23, levels established during a previous long-term rally.
