Silver Price Forecast: XAG/USD hits one-month high, eyes $62.00 after technical breakout

Silver (XAG/USD) builds on the previous day's modest gains and attracts strong follow-through buying for the second straight day on Wednesday. The positive momentum lifts the white metal to the $62.00 neighborhood – the highest level since July 7 – during the early European session.

An intraday breakout through the 200-period Simple Moving Average (SMA) on the 4-hour and a two-week-old trading range hurdle near the $60.00 psychological mark were seen as key triggers for the XAG/USD bulls. Meanwhile, the Relative Strength Index (RSI) at 73.53 signals overbought conditions, while the Moving Average Convergence Divergence (MACD) remains positive, suggesting that the upside momentum remains strong.

Hence, any subsequent move up beyond the $62.00 mark is likely to confront a hurdle near the 23.6% Fibonacci retracement level of the May-July decline at $62.92. A sustained break there would expose higher Fibo. barriers at $67.98 and $72.08. On the flip side, initial support is pegged near the 200-period SMA at $59.04, ahead of the Fibonacci anchor near $54.73, where buyers could re-emerge on a more pronounced pullback.

Nevertheless, the constructive technical setup suggests that the path of least resistance for the XAG/USD is to the upside as the latest optimism over a potential US-Iran deal continues to undermine the US Dollar (USD). Hence, any corrective slide could be bought into and remain cushioned amid receding US Federal Reserve (Fed) rate hike bets, which tend to benefit non-yielding commodities, including Silver.

XAG/USD 4-hour chart