Silver Holds $38.70 Support Despite Risk-On Sentiment Dip
XAG/USD’s downside remains limited, holding steady above the $38.70 support level
FUNDAMENTAL OVERVIEW:
Silver (XAG/USD) is trading lower for a second straight session on Thursday, pressured by a risk-on market tone that is reducing demand for safe-haven assets. However, the pair is holding above key support near the $38.70 level (July 22 lows), helping to preserve the broader bullish structure for now.
Investor sentiment has improved amid reports that the EU is nearing a trade agreement with the U.S., following recent deals with Japan, the Philippines, and Indonesia. This has lifted risk appetite, as markets gain confidence that the most severe trade tariffs may be avoided.
From a technical perspective, the overall price action remains bullish, though signs of exhaustion are emerging after a roughly 10% rally since late June. The 4-hour RSI is displaying bearish divergence, which often signals an impending correction.
The $38.70 support zone is currently preventing further downside, but the pair is struggling to retest Wednesday’s high. A break below this level could shift attention to the confluence of the July 18 lows and a rising trendline around $38.10. A drop beneath that would confirm a trend reversal, with the next support zone seen near the July 15–17 lows at $37.55.
On the upside, immediate resistance is at Wednesday’s peak of $39.40. A clear move above this could open the door toward the $40.00 psychological level, which also marks the 161.8% Fibonacci extension of the early July rally.
XAG/USD TECHNICAL ANALYSIS CHART:
Technical Overview:
XAG/USD is trading within a up channel.
XAG/USD is moving above all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in Buying Zone, while the Stochastic oscillator suggests Neutral trend.
Immediate Resistance level: 39.40
Immediate support level: 38.70
HOW TO TRADE XAG/USD
After a strong and sustained upward move, XAG/USD has now paused its rally and is undergoing a corrective pullback, currently hovering near an immediate support area. If this level fails to hold, the price may decline toward a major support zone. Should XAG/USD find support there—especially with confluence from a key Fibonacci level—a fresh bullish wave to the upside could potentially begin.