XAG/USD Price Forecast: Silver breathes as US Dollar falls

XAG/USD Current Price: $59.49

• The US Dollar turned negative mid-day, and month-end profit-taking interrupted the rally.
• Encouraging United States data provided temporal support to the American currency.
• XAG/USD consolidates near its recent lows, bounce irrelevant as long as below $61.

Commodities are all about the US Dollar (USD) strength or weakness these days. Silver flirts with $60 an ounce in the American session, after trading as low as $56.61 at the beginning of the day. The Greenback started the day with a strong note, as investors keep assessing stable Oil prices amid ongoing negotiations in the Middle East, along with persistent speculation that the Federal Reserve (Fed) will hike interest rates before the year is over.

The USD gyrated south in the American session, losing ground against most major rivals and leading to precious metals recovering part of their recent losses. There was no particular catalyst for the USD's sharp retracement, yet profit-taking ahead of the monthly close could be a reasonable cause for USD volatility.

United States (US) data was quite encouraging, although its positive impact on the Greenback was short-lived. The Job Openings and Labor Turnover Survey (JOLTS) Job Opening report showed openings totaled 7.594 million at the end of May, above expectations of 7.3 million, and higher than the 7.585 million positions reported in April (revised from 7.618 million). Also, the Conference Board Consumer Confidence Index rose to 91.2 in June, up from a revised 90.6 in May.

Wednesday will bring the US ADP Employment Change report for June and the ISM Manufacturing Purchasing Managers’ Index (PMI) for the same month. The employment figures are relevant ahead of the release of the Nonfarm Payroll (NFP) report scheduled for Thursday. Additionally, market participants will keep an eye on the European Central Bank (ECB) Central Banking Forum taking place in Sintra, Portugal, with several central banks’ leaders scheduled to hit the wires.

XAG/USD short-term technical outlook

The advance seems modest, but the XAG/USD pair is approaching a critical technical resistance. The pair has a critical barrier at $61, where it bottomed twice this year before finally breaking lower. The level should act as a major barrier to maintain the bearish trend alive and kicking.

In the four-hour chart, XAG/USD maintains a bearish near-term bias as price holds below both the 100-period Simple Moving Average (SMA) at $64.23 and the 200-period SMA at $69.58. The metal has recently reclaimed the 20-period SMA at $58.43 as immediate support, hinting at some stabilization, while the Momentum (14) indicator remains stuck to its midline. At the same time, the Relative Strength Index (RSI) indicator stabilized around 51, shifting to a neutral stance and suggesting that selling pressure has eased but upside remains structurally capped.

On a daily basis, technical readings suggest sellers paused but retain control. XAU/USD is still clearly bearish, as price remains well below the 20-, 100-, and 200-day SMAs at $65.18, $75.55, and $69.73, respectively. This stacked overhead SMA configuration hints at a firmly capped market, while the RSI barely bounced from oversold territory, holding deep in negative territory, suggesting no additional gains ahead.

On the topside, initial resistance is seen at the former lows at $61.00, followed by the 100-period SMA at $64.23, with a stronger barrier at the 200-period SMA near $69.58, where the broader downtrend would likely reassert itself. On the downside, the 20-period SMA at $58.43 offers the first layer of support ahead of the yearly low at $55.63. Once below the latter level, sellers are likely to regain confidence and push the metal towards the $50 threshold.

(The technical analysis of this story was written with the help of an AI tool.)