XAG/USD is stable at $36.70, sitting just below 13-year highs amid concerns about tariffs from the latest US policy updates. The price has been bouncing between $35.50 and $37.30, supported by the 20-day SMA at $36.42, as it consolidates over the past four weeks. US President Trump has announced new tariffs affecting 14 countries, including Japan and South Korea, with a 25% tax. An executive order has also pushed back the reciprocal tariff deadline to August 1, heightening trade tensions.

Market Reaction And Technical Analysis

Uncertainty in trade has increased demand for Silver as a safe haven. However, expectations for Federal Reserve policy are limiting further gains. Strong US jobs data has made an immediate interest rate cut less likely, helping to stabilize the Dollar. Technically, Silver’s price movement has been cautious since the June rally. The narrowing Bollinger Bands indicate lower volatility, suggesting a potential breakout may be coming. The RSI is at 60, and the Rate of Change (ROC) is +1.21, both reflecting moderate buying interest without strong conviction. If Silver closes above $37.30, it could rise to $38.00 and $39.00. On the flip side, if support at $36.42 fails, the price could test the lower Bollinger Band at $35.72 or even drop to $34.50. With prices steady around $36.70, the market acknowledges past gains while adjusting to recent macro changes. Silver has been moving sideways for nearly a month, trapped between tight technical levels. The 20-day simple moving average at $36.42 serves as a key midpoint, often respected by price action. This narrow range of $35.50 to $37.30 is quite telling. It shows the market’s reluctance to fully embrace risk but also a lack of strong upward movement. Traders note that stronger labor data has reduced the urgency for easing, which supports the Dollar and weighs on metals like Silver.

Implications Of Trade Tensions And Future Outlook

Recent tariff changes pose additional challenges. The administration plans to impose a 25% levy on a variety of goods from 14 countries, showing a return to protectionist policies. Although the implementation date in early August allows time for market reaction, it signals rising trade friction. In past instances, geopolitical stress and trade barriers have led investors toward precious metals. While Silver is generally less volatile than Gold, it still attracts funds when uncertainty spikes. The key question is whether demand will be strong enough to break through resistance at $37.30. If this happens with daily close confirmation, the metal could quickly move into the mid-$38s. Currently, volatility is low, with compressed Bollinger Bands hinting at an upcoming directional move. This isn’t just a technical detail; it suggests the potential for a shift in this consolidation phase, although the direction remains uncertain. The Relative Strength Index is at 60, reflecting mild purchasing momentum. The positive but modest Rate of Change indicates some buying pressure, though it isn’t aggressive. For traders using derivatives, it’s wise to adjust positions for two potential outcomes: either the range will continue, or a breakout will occur beyond recent highs. Closing around $37.30 could invite more bullish positions, setting sights on $38.00 and $39.00 if momentum builds. On the downside, a clear break below $36.42 could trigger short-term selling, potentially pushing prices down to the lower channel and possibly to $34.50 if macro pressures rise or if the Dollar unexpectedly strengthens. In summary, there seems to be little desire for heavy exposure in either direction until volatility increases or external influences, like further Fed discussions or trade developments, provide clearer conviction. We are particularly focused on any shifts in forward rate expectations, as these continue to be critical for Silver’s direction. Create your live VT Markets account and start trading now.

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