HG MARKETS:

Silver (XAG/USD) continued its winning streak, gaining strong follow-through momentum for the third consecutive session and rallying to the $40.50–$40.55 zone during the Asian session. This marks the precious metal’s highest level since September 2011, underscoring the strength of the current bullish trend.

From a technical standpoint, last week’s decisive daily close above the $39.00 level served as a major breakout trigger. The subsequent breach of both the previous multi-year peak around $39.50 and the key psychological barrier at $40.00 further reinforced the bullish case. Technical indicators also remain favorable, with positive oscillators on the daily chart supporting continued upward momentum.

That said, the daily Relative Strength Index (RSI) is now hovering near overbought territory, suggesting that the rally may be due for a period of consolidation or a modest corrective pullback. Such a move would be considered healthy within the broader bullish trend, as it could provide fresh entry opportunities for traders who missed the initial surge.

On the fundamental side, silver’s rally has been supported by a softer U.S. dollar, expectations of potential Federal Reserve rate cuts later this year, and firm demand for safe-haven assets amid ongoing geopolitical tensions. Additionally, industrial demand for silver, particularly in solar energy and electronics manufacturing, continues to provide a solid underlying floor for prices.

In terms of support, any corrective decline is likely to attract dip-buying interest near the $40.00 handle, followed by the $39.50 zone, which now stands as a strong short-term base. A decisive break below these levels, however, could trigger technical selling and open the door to a deeper retracement in the near term.

On the upside, immediate resistance is aligned at the Asian session peak of $40.50–$40.55. A sustained move above this zone could pave the way for a retest of the $41.00 round figure. Beyond that, bullish momentum may drive silver prices towards the next relevant hurdle near the $41.50 area, reinforcing the outlook for further appreciation.

Overall, the combination of technical breakouts, supportive macroeconomic conditions, and firm industrial demand continues to favor silver bulls. While near-term caution is warranted given overbought signals, the broader bias remains tilted to the upside as investors seek both growth and safe-haven diversification.