Silver Price Outlook:
Silver Price Forecast: XAG/USD Ponders Breakout Alongside Gold Gains
Silver surged to its highest price in more than a month Wednesday on the back of a 3% daily gain. Recent price action has seen the metal climb more than 8.5% in the month of April as slipping Treasury yields open the door to gains for commodities like gold and silver. As a result, XAG/USD may look to continue higher should the fundamental forces at play remain intact.
Silver Price Chart: 4 – Hour Time Frame (February 2021 – April 2021)
To that end, early resistance resides dangerously close to the metal’s Wednesday close, around $26.63. The barrier is derived from a prior swing high in March and could look to stall progress to the topside. Nevertheless, Wednesday’s price action saw silver establish a convincing break above another area that had proven troublesome – a Fibonacci level around $26.20. The line had resisted attempts higher throughout April and in March, but the recent breakout should see the level take on a more supportive role going forward.
With that in mind, silver could be trapped by resistance overhead at $26.63 and support beneath at $26.20. A lack of continuation at this stage might allow bulls to consolidate recent gains, however, and prove constructive in pursuit of a longer-term breakout rally. Fluctuating between support and resistance could open the door to range trading strategies.
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Should a continuation beyond $26.63 occur, silver bulls could set their sights on $26.95 as an area of secondary resistance. The zone has served as both support and resistance in the past, most recently evidenced by price action in February and early March. While the technical landscape looks to be improving, the key to silver price gains remains US Treasury yields for the time being and a resumption higher in that market could hamper commodity price gains. As XAG/USD looks to continue its recent rally, follow @PeterHanksFX on Twitter for updates and analysis.
–Written by Peter Hanks, Strategist for DailyFX.com
Contact and follow Peter on Twitter @PeterHanksFX