Silver (XAG/USD) jumped more than 4% on Wednesday, trading around $62.30 and reaching its highest level in a month. This rally was triggered by weaker-than-expected US ADP employment data and easing energy-driven inflation, which led traders to scale back expectations for further Federal Reserve rate hikes [1].
From a technical perspective, the daily momentum for silver has improved. XAG/USD reclaimed the 21-day Simple Moving Average (SMA) at $58.31 and is now challenging the 50-day SMA at $62.65. The Relative Strength Index (RSI) has risen to 56, and the Moving Average Convergence Divergence (MACD) remains above zero, both indicating building bullish momentum [1]. Immediate resistance is seen at the 50-day SMA near $62.65, with a daily close above this level potentially opening the way toward the $65.00 barrier and the 100-day SMA at $69.22. On the downside, initial support is at the 21-day SMA ($58.31), followed by a horizontal floor near $55.50 [1].
Despite the positive daily momentum, the weekly outlook for silver remains bearish. XAG/USD is trading below the 50-week SMA at $65.94 and the 21-week SMA at $68.64. The weekly RSI stands at 45, and the MACD is below zero, suggesting that the recent advance has not yet developed into a broader bullish reversal [1]. Key resistance on the weekly chart is at $65.00 and $65.94, with support near $55.50 and the 100-week SMA at $49.51 [1].
The article notes that silver's price is influenced by factors such as US dollar strength, interest rates, and inflation data. As a yieldless asset, silver tends to rise with lower interest rates and a weaker dollar [1].
CONCLUSION
Silver's more than 4% rally was driven by softer US economic data and reduced expectations for Fed rate hikes, improving its short-term technical outlook. However, the broader weekly trend remains bearish, with key resistance levels yet to be overcome. Market participants are watching for a sustained break above $65.00 to signal a potential shift in the longer-term trend.