XAG/USD increased by 0.24% on Friday and is set to finish the week with a gain of over 3.5%. The price has risen more than 6% since the low on July 31, confirmed by a bullish harami pattern after exceeding the July 31 high of $37.26. Silver’s price rose for the fourth straight session, aiming to close above $38.00 per troy ounce and near the weekly high of $38.50. This rise is supported by a weaker US Dollar and growing speculation about Federal Reserve rate cuts. XAG/USD is now trading with daily gains of 0.24% and is on track to end the week over 3.5% higher. Silver is just $1.50 away from its yearly high. On July 31, it tested the 50-day Simple Moving Average at $36.20. It has since surged over 6%, crossing the 20-day SMA at $38.06, indicating strong upward momentum. Breaking the $39.00 level is crucial to testing the year-to-date high of $39.52 before challenging $40.00. However, if the price drops below $38.00, it could fall back toward $37.00, targeting the 50-day SMA at $36.85. With silver gaining for the fourth consecutive day, a clear bullish trend is emerging. This is largely due to a weakening US Dollar, which has dropped to a three-month low around 101.50 on the US Dollar Index (DXY). The market is increasingly factoring in a Federal Reserve rate cut for September. For derivative traders, this suggests positioning for further gains in the coming weeks. Buying call options with strike prices at or above the $39.52 year-to-date high, like the $40.00 psychological level, could be a solid strategy. Recent data from the CME FedWatch Tool indicates a 75% chance of a 25-basis-point rate cut next month, likely boosting prices further. We should monitor the $38.00 level, as it now acts as key support. A break below this point could signal a short-term reversal. Thus, protective put options with a $37.50 strike could be a good hedge for long positions, especially if there’s a pullback toward the 50-day moving average near $36.85. Confidence in this upward trend is strengthened by signals of physical demand. The iShares Silver Trust (SLV) added over $500 million in net inflows just last week. This demand is bolstered by predictions of a 15% increase in silver use for solar panel manufacturing this quarter. Historically, the current price action resembles market conditions from late 2010. After breaking through similar technical and psychological barriers, silver began a sharp rally toward its highs near $50.00 in early 2011. While this is not a guarantee, it highlights the explosive potential once key levels are surpassed.

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