XAG/USD Price Forecast: Silver pauses recovery, holds around $65

XAG/USD Current Price: $64.80

• Market participants keep an eye on developments in the Middle East in the absence of relevant data.
• The United States will publish the July Consumer Price Index on Wednesday.
• XAG/USD sheds some ground after peaking at a fresh multi-week high of $66.59.

Silver prices are stable around the $65 mark in the American session on Wednesday, after briefly trading above $66, its highest in nearly two months. Market players have found no relevant drivers so far this week, with headlines pointing to continued tensions in the Middle East and to a conflict with no resolution in sight.

The latest on the matter indicates that Iran has submitted a new set of conditions for reopening the Strait of Hormuz, clarifying that negotiations with Oman over traffic through the strait have nothing to do with its reopening. The stalemate between the United States (US) and Iran continues to create uncertainty in financial markets, which closely monitor oil prices. Both Brent and West Texas Intermediate (WTI) crude prices have been on the rise over the last few days, reviving inflation-related concerns and speculation about tighter monetary policy by central banks.

A clearer picture on the matter, particularly in the US, will appear on Wednesday, as the country will publish July Consumer Price Index (CPI) data. The core annual CPI is foreseen at 2.5%, slightly below the 2.6% posted in June, a reading that would not affect the odds for future Federal Reserve (Fed) monetary policy decisions. However, if the outcome surprises to the upside, market players are likely to increase bets for a September hike, which in turn should strengthen the Greenback.

XAG/USD short-term technical outlook

On the four-hour chart, XAG/USD trades with a clear bullish bias, as price remains above the 20-period Simple Moving Average (SMA) around $63.96. The 100- and 200-period SMAs are clustered well lower near $59.77 and $59.37, respectively, reinforcing a well-supported uptrend. Momentum remains positive, with the Relative Strength Index (RSI) indicator hovering in the low-60s and the Momentum indicator still in positive territory yet retreating, suggesting the latest consolidation is more a pause within the prevailing advance than a topping pattern.

According to the daily chart, XAG/USD holds well above the 20-day SMA at $59.32, while the 100-day and 200-day SMAs at $68.93 and $71.39, respectively, remain overhead, leaving the broader trend still capped but the near-term tone constructive. Fourteen-day Momentum is positive, and the RSI at 59.99 stays in bullish territory, suggesting that buying pressure is improving as price recovers from recent lows.

On the downside, initial support emerges at the nearby 20-period SMA around $63.96, where buyers are likely to defend the short-term trend line. A deeper pullback would expose the next demand band around the 100- and 200-period SMAs at $59.77 and $59.37, where the broader bullish structure would still be intact as long as price holds above this medium-term base. On the topside, initial resistance emerges at the 100-day SMA near $68.93, ahead of the longer-term barrier provided by the 200-day SMA at $71.39. O

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