Silver (XAG/USD) continues to exhibit bullish momentum, trading within a narrow band just under the year-to-date (YTD) peak of $34.90 touched earlier this week. During the Asian trading session on Wednesday, the white metal was seen hovering around the $34.50 level, showing signs of healthy consolidation after an impressive breakout through a significant technical barrier. 

Despite failing to capitalize fully on Tuesday’s modest rebound from below $34.00, the broader technical landscape remains decidedly bullish, indicating potential for further upside.  Raliplen offers a broker-backed walkthrough of this topic in an easy-to-understand format.

Technical Breakout Above $33.80 Fuels Bullish Sentiment

The decisive breakout through the $33.80 resistance, a critical upper boundary of a multi-week consolidation range, has marked a key inflection point for XAG/USD. This breakout signaled a shift in near-term momentum and provided a technical validation for bullish traders aiming higher. 

The daily oscillators, particularly the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), are holding firmly in positive territory, reinforcing the current uptrend and leaving sufficient room before entering overbought conditions.

Such a positioning suggests that the path of least resistance remains to the upside. Market participants appear to be comfortable buying dips, particularly around the newly established support zone near $33.80, which previously acted as resistance. This role reversal is a classic bullish signal, reflecting underlying market confidence in the continuation of the appreciating trend.

Key Resistance: $34.80-$34.90 and Multi-Year Highs in Focus

For the bullish narrative to gain further traction, a clear break above the $34.80-$34.90 zone is essential. This region marks not only the YTD peak but also aligns closely with a twelve-year high previously seen in October 2024, making it a pivotal technical area. 

A sustained move above this zone would confirm bullish continuation and likely trigger a fresh wave of momentum buying.

If XAG/USD manages to surpass this psychological and technical barrier, it could open the door toward the next upside target near $35.66, the swing high from March 2012. Beyond that, bulls may set their sights on reclaiming the $36.00 mark, a level not seen since February 2012, marking a significant milestone in silver’s long-term recovery.

Support Zones to Watch: $34.00, $33.65, and $33.00

Despite the constructive setup, short-term corrections cannot be ruled out. However, any pullback is expected to remain shallow and present buying opportunities, especially if the metal dips below $34.00. The first layer of support lies near $33.80-$33.65, which, as noted, is a key breakout area and is likely to act as a technical floor on any downside move.

Should XAG/USD slip below this zone, the next important level to monitor is the $33.00 round figure, which holds psychological significance and could serve as a strong demand zone for dip buyers. 

Further below, the $32.75-$32.70 support area, a horizontally aligned technical floor, offers robust protection against deeper declines. A decisive break beneath this final level, however, would jeopardize the bullish outlook, potentially shifting the short-term bias in favor of bearish traders.

Broader Market Sentiment and Macroeconomic Backdrop

Silver’s recent rally is not occurring in isolation. The broader commodities complex has been supported by a confluence of factors, including expectations of lower interest rates, elevated inflation concerns, and geopolitical uncertainties. 

These macro tailwinds have fueled investor appetite for precious metals, especially silver, which enjoys dual appeal as both a monetary metal and an industrial commodity.

Moreover, with the Federal Reserve maintaining a cautious stance and global growth forecasts remaining uncertain, demand for safe-haven assets like silver is likely to remain strong. Any indication of dovish policy shifts or unexpected inflation prints could provide additional catalysts for silver to extend its bullish trajectory.

Momentum Indicators Favor Further Upside

From a momentum standpoint, the technical indicators remain highly supportive of continued gains. The RSI is comfortably above the midline, without signaling any immediate risk of overbought exhaustion. 

The MACD histogram is positive, with the signal line crossover reinforcing the prevailing bullish trend. Short- and medium-term moving averages are all sloping upwards, with price action consistently finding support above key EMAs, further confirming the strength of the upward move.

Conclusion: Bulls Hold the Reins, Watch for Continuation Above $34.90

In summary, silver (XAG/USD) remains well-positioned within a bullish technical framework, with the recent breakout above $33.80 marking a pivotal shift in market dynamics. As long as prices hold above the $33.65-$34.00 support band, the near-term bias remains firmly bullish.

A break above the $34.90 YTD high would likely confirm a bullish continuation, exposing key resistance levels at $35.66 and $36.00. While minor corrections are possible, they are expected to be short-lived and well-supported, with the broader outlook still favoring further appreciation.