XAGUSD testing resistance, breakout ahead?Silver has climbed into the spotlight, trading more than 40 USD per ounce, its highest level over a decade. Silver benefits from a dual role as it is both a safe haven and an industrial metal. On the defensive side, expectations of a Fed rate cut and heightened geopolitical tensions encourage investors to seek shelter in precious metals. On the growth side, silver demand is being reinforced by the global energy transition, with China’s booming solar exports driving stronger metal consumption. This combination of investor demand and industrial use gives silver a unique support base, suggesting prices can remain elevated and may have further room to rise if geopolitical risks flare or renewable energy momentum accelerates.
XAGUSD extended its rally within the ascending channel, with prices testing the 127.2% Fibonacci Extension. Sustaining its bullish momentum and a break above the resistance at 41.30 may prompt a further rally toward the ascending channel's upper bound and 161.8% Fibonacci Extension at 43.00. Conversely, a retreat below 41.50 may see XAGUSD retrace toward the support at 39.50.
By Li Xing Gan, Financial Markets Strategist Consultant to Exness
