On 12 December, we noted that silver had climbed above $60. It took the market less than two weeks to advance further and clear the next psychological milestone at $70.

Today, XAG/USD reached $72, extending the sharp rally that began in the autumn. Gold prices have also been showing strong momentum.

The surge in precious metals has been driven by:
→ robust ETF buying from retail investors;
→ rising geopolitical tensions (media reports suggest the US has deployed additional military forces close to Venezuela);
→ reduced liquidity during the holiday period. Thin trading conditions often leave markets exposed to abrupt price swings.

Technical Analysis of XAG/USD

When reviewing the XAG/USD chart two weeks ago, we:
→ identified an ascending channel (marked in blue);
→ outlined the possibility of a pullback from the channel’s upper boundary.

Since then (as indicated by the arrows):
→ the price retreated twice from the upper boundary on 12 and 16 December;
→ on 17 December it broke above the channel;
→ on 19 December the former resistance acted as support, allowing buyers to consolidate above the blue ascending channel.

The current move is characterised by a steep upward trajectory (shown in orange), with the breakout above the $70 psychological level appearing decisive.

With silver trading this morning close to the upper edge of the orange channel and the RSI in overbought territory, the market looks vulnerable to a corrective pullback. Indeed, long holders may be tempted to lock in profits after a gain of nearly 30% since the start of the month.

That said, the unique dynamics of holiday trading could still fuel an attempt to push towards the $80 level.

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