Silver price forecast: XAG/USD holds above $37.4 amidst supportive fundamentals

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05.08.2025

Silver price forecast: XAG/USD holds above $37.4 amidst supportive fundamentals — Traders eye Silver breakout

Silver price is trading quietly on Tuesday, August 5, posting a marginal gain of 0.2% as it hovers near $37.40 during the European session. The white metal is now on its third consecutive daily advance, benefiting from the dovish shift in Federal Reserve expectations after last week’s softer U.S. jobs data. However, price action has slowed today, and momentum appears to be facing a potential roadblock.

• Silver price retests key resistance at $37.50 for the first time since mid-July

• Volume increases on 4-hour chart suggest traders are positioning for breakout.

• Dovish Fed bets and trade tensions support Silver while ISM PMI and trade data loom ahead

The rally from last Friday and Monday was sparked by the weaker-than-expected nonfarm payrolls report, which increased the probability of a September rate cut. Markets are now pricing in over 60 basis points of easing by the end of the year. These expectations have pressured the U.S. dollar and boosted demand for non-yielding assets like Silver. Despite that, the daily volume that accompanied Monday’s upclose was the lowest in the past 30 days, raising concerns about the strength of the ongoing move.

Silver price dynamic (May - July 2025). Source: Tradingview

Technically, Silver is facing a significant resistance level at $37.50. This level previously acted as support in mid-July and has now flipped into resistance. Price has tested this zone today but failed to break through convincingly, keeping price pinned slightly below the level. Reinforcing this resistance are the 50 and 100 EMAs on the 4-hour chart. At the same time, the 20 EMA is providing support below, enclosing today’s range and setting the stage for an imminent breakout.

Silver 4-hour volume signals traders are bracing for a volatility spike

What adds complexity to the situation is that trading volume on the 4-hour chart has been rising steadily, even as price trades sideways. This is often a precursor to a larger move, suggesting that market participants are positioning for a directional shift. Whether this results in an upward continuation depends largely on whether Silver can break and close above the $37.50 mark.

On the macro front, additional support may come from rising global trade tensions. President Donald Trump has threatened higher tariffs on India due to its ongoing purchases of Russian oil. Meanwhile, the European Union has delayed retaliatory tariffs against the United States, keeping trade uncertainty elevated. These developments are likely to keep the dollar in check and support precious metals in the near term.

Investors are now awaiting key economic data releases, including the ISM services PMI and June trade figures, for further insight into the U.S. outlook. Until then, Silver’s direction hinges on whether the $37.50 resistance holds or gives way to renewed buying pressure supported by macro tailwinds.

Silver fell after the Fed held rates steady and reduced expectations for a September cut. Silver broke below consolidation and stayed under the 20-day EMA, showing bearish momentum.

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