Silver Price Retreats from 2012 Highs

As shown on the XAG/USD chart, the price of silver climbed above $37 per ounce yesterday — a level not seen since 2012. However, this morning, the price has dropped by approximately 2.5% from yesterday’s peak.

The bullish driver behind the rally has been fears that the US could become involved in a military conflict between Israel and Iran. Concerns in financial markets intensified after media reports stated that US officials are preparing for a potential strike on Iran.

Another factor influencing silver's price was the Federal Reserve’s decision to keep interest rates unchanged and maintain a cautious policy stance. Yesterday, Jerome Powell warned that President Trump’s tariffs could fuel inflation (a bullish signal for silver) and complicate the economic outlook.

Technical Analysis of the XAG/USD Chart

In our previous analysis of the XAG/USD chart, we identified an upward channel. This channel remains relevant, though its configuration has shifted.

The price of silver remains in the upper part of the channel (a sign of strong demand). However, two signals suggest a potential correction may develop:

→ A bearish divergence on the RSI indicator;
→ A sharp decline from the channel’s upper boundary (marked with a red arrow), breaking through the local line that divides the upper half of the channel into quarters.

Nevertheless, given the scale of geopolitical risks, there is a chance that the bears may struggle to significantly shift the trend — especially with markets nearing the weekend closure.

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