Silver Surges Above $36 as US Dollar Hits Three-Year Low

Silver (XAG/USD) has staged a strong recovery, climbing past $36.00 after hitting a five-day low of $35.46. This rebound, driven by a sharp decline in the US Dollar to a three-year low, signals robust bullish momentum. Trading at $36.30 with a 0.25% daily gain late in Thursday’s North American session, silver’s upward trajectory raises questions about its next moves and the factors fueling its rise.

Dollar’s Decline Fuels Silver’s Rally

The US Dollar’s plunge has been a key catalyst for silver’s advance. Weakened by softer-than-expected economic data, the Greenback has lost ground against major currencies, making dollar-denominated assets like silver more attractive. This dynamic has propelled XAG/USD to reclaim the $36.00 level, forming a bullish hammer candlestick pattern—a strong indicator of renewed buyer confidence. The market’s focus now shifts to whether silver can sustain this momentum amid broader economic uncertainties.

Technical Outlook Signals Further Upside

Silver’s technical picture supports a bullish outlook. The hammer pattern on Thursday’s chart suggests the uptrend remains intact, with the June 9 swing high of $36.88 as the next target. Beyond that, the year-to-date high near $37.00 and the 13-year peak of $37.49 from February 29 are within reach. The Relative Strength Index (RSI), though recently exiting overbought territory, remains stable, indicating buyers still hold the upper hand. However, a drop below $36.00 could test support at $35.40, with further levels at $35.00, $34.00, and $33.00 if selling pressure intensifies.

What’s Next for Silver?

Silver’s rally reflects a confluence of a weaker US Dollar and strong technical momentum, but risks loom. Economic data releases and shifts in monetary policy expectations could influence the Dollar’s trajectory, impacting silver prices. Investors should watch for support levels holding firm to confirm the bullish trend or brace for volatility if prices slip below key thresholds. For now, silver’s path appears tilted upward, with potential to challenge multi-year highs if conditions remain favorable.

The interplay of currency dynamics and market sentiment will shape silver’s near-term future. Maintaining levels above $36.00 could pave the way for further gains, but vigilance is key as economic uncertainties persist.