Silver price prediction: XAG/USD extends rally as ISM data reinforces rate cut bets
Silver is gaining traction in the early days of August, recording its third consecutive daily upclose as bullish momentum returns to the precious metal.
On Tuesday, the rally pushed price above the key resistance level at $37.50 and reclaimed the 20-day EMA at $37.65. This marks the first close above the short-term trend indicator since the late-July decline, offering fresh technical support for the bulls.
Highlights
-Silver posts third straight daily gain after reclaiming the 20-day EMA
-Weak ISM Services PMI at 50.1 strengthens the case for a Fed rate cut
-RSI enters bullish zone while volume lag suggests cautious optimism
The catalyst for the latest leg of the rally came from Tuesday’s weaker-than-expected ISM Services PMI data. The index came in at 50.1, falling short of the 51.5 forecast and only slightly above the contractionary threshold. This reading reflects a slowing pace of growth in the non-manufacturing sector, which puts pressure on the U.S. dollar and supports market expectations for a Federal Reserve rate cut in September. The renewed dovish narrative is benefiting non-yielding assets like Silver, which tend to perform well in a lower interest rate environment.
Silver price dynamic (May - July 2025). Source: Tradingview
However, there are some questions about the conviction behind the move. The previous two green daily candles were formed on declining volume, a sign that while price is rising, participation may not be as strong. Nonetheless, the successful reclaim of the 20-day EMA now shifts this level into a support zone for any short-term pullbacks.
Silver daily RSI enters bullish zone despite weak participation
From a momentum standpoint, the daily RSI has now entered bullish territory, confirming the strength of the recovery. This technical confirmation aligns with the broader macro backdrop, where ongoing geopolitical tensions — such as unresolved trade frictions among the U.S., China, Russia, and India — and the continued war in Ukraine reinforce safe-haven flows into precious metals.
Looking ahead, the immediate bullish target is the previous week’s high at $38.33. That level also marks a buy-side liquidity zone that could act as a magnet for price. Beyond that, the sellside imbalance near $38.50 may come into view if momentum accelerates. For now, Silver appears to be in a favorable technical and macro position, and as long as price holds above the $37.65 EMA support, near-term sentiment is likely to stay constructive.
Silver gained support from dovish Fed expectations after soft U.S. jobs data. Silver retested the $37.50 resistance as volume rose on the 4-hour chart.
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