Usman Salis
Silver (XAG/USD) dropped about 0.50% on Tuesday as the US dollar found its footing again, with traders getting excited about possible progress in US-China trade talks.
Silver had a rough Tuesday, pulling back from that sweet $37.00 resistance level as the US dollar decided to flex its muscles again. The white metal gave up about half a percent as investors started feeling pretty good about potential US-China trade deal news that's supposed to drop later today. Right now, XAG/USD is sitting at $36.52, which puts it below where it started the day.
You know how it goes with precious metals - when the dollar gets stronger, it makes silver pricier for folks using other currencies, and that usually means less buying interest. It's like a seesaw effect that we see time and time again in the markets.
Silver (XAG) Still Looking Bullish Despite the Pullback
Here's the thing though - even with this recent dip, silver's still looking pretty solid from a technical standpoint. The metal already smashed through that October 23, 2024 high of $34.86, which opened the floodgates for the run up to $35 and beyond. That's a pretty big deal and shows there's still some serious buying power behind silver.
But there's a catch. The RSI (that's the Relative Strength Index for those keeping track) has hit overbought territory, which basically means silver got a bit ahead of itself. When you see that happen, it's pretty normal to get a pullback like we're seeing now. Think of it as the market taking a breather before deciding what to do next.
What Silver (XAG) Traders Need to Watch
For the bulls to stay happy, silver really needs to keep its head above $35.00. That's become the line in the sand - as long as we're above that level, the uptrend is still alive and kicking.
If silver wants to keep pushing higher, it's got some work cut out for it. The next hurdles are sitting at $36.82, that big round number of $37.00 that's been giving it trouble, and $37.49. That last one is especially important because it's a 13-year high from way back on February 29 - breaking that would be huge.
Now, if things go south and silver can't hold $36.00, then we'd be looking at $35.40 as the first real safety net. That used to be a high from October 2012, but now it's turned into support. If that breaks, then we're probably heading down to test $35.00, and after that it's those big round numbers at $34.00 and $33.00. The last line of defense would be that 50-day moving average down at $32.95 - that's where the longer-term buyers would probably step in.
Usman Salis
