Silver hovers above $38

Silver is hovering above the $38.00 area for the second consecutive day, consolidating losses after a significant reversal at the end of last week, as strong US macroeconomic data curbed hopes of Fed cuts and boosted support to the US dollar.

The precious metal is practically flat on Tuesday’s daily chart, with the dollar clinging to gains ahead of a string of key US macroeconomic events, namely the Q2 US Gross Domestic Product and, above all, the Federal Reserve’s monetary policy decision, both due on Wednesday.

The technical picture shows XAGUSD correcting lower after an extended rally from April lows, anticipated by the bearish divergence observed in the 4-hour charts and confirmed by Friday’s impulsive reaction from the $39.20 area.

The white metal is now hesitating right above the July 29 low at $38.00, with technical indicators pointing lower.

Further depreciation would face converging support lines at the ascending trendline from early April lows, now around $37.85, ahead of the July 15, 16, and 17 lows near $37.55.

On the upside, XAGUSD remains capped below Monday’s high, at $38.35, ahead of the July 24 low, at $38.75, and the $39.55 long-term high reached last week.

XAGUSD price charts by TradingView