Silver (XAGUSD) Price Forecast: Extends Rally with New Trend High

Breakout Above Trend Channel

Silver broke out to a fresh trend high of $40.76 during Monday’s shortened futures trading session due to the U.S. Labor Day holiday. The move surpassed last week’s high of $39.97, confirming continued bullish momentum. Buyers also pushed through the upper boundary of a large ascending trend channel, a level that previously acted as resistance. If the early-week advance holds, the dominant angle of ascent, supported by the 50-Day moving average at $37.80 and the rising 20-Day moving average at $38.39, should continue to guide the uptrend.

Approaching Resistance Zone

Despite the strength, silver is nearing a confluence of resistance levels that could test bullish momentum. The zone between $40.86 and $41.09 includes the 200% extension of a recent bearish correction, the 127.2% Fibonacci extension of the 2021 decline, and the 161.8% projection of a short-term rising ABCD pattern. Together, this range represents a potential pivot zone where silver may stall or consolidate before attempting higher levels.

Long-Term Fibonacci Levels

Above this near-term zone, a major long-term barrier awaits. The 78.6% Fibonacci retracement at $41.65, derived from the full decline since the 2011 peak at $49.81, marks a critical threshold. A decisive breakout and sustained close above this level would strengthen the long-term bullish case, opening the door to eventually retest the 2011 record high of $49.81. Until then, traders should expect resistance and possible corrective activity around this zone.

Short-Term Outlook

Short-term conditions suggest silver may be overextended, raising the probability of a pullback or consolidation before another advance. Nonetheless, the broader trend structure remains bullish. Notably, August closed near monthly highs and above July’s peak of $39.53, signaling a confirmed monthly breakout and reinforcing the bullish momentum on higher time frames.

Silver remains technically strong, but its immediate challenge lies in navigating the confluence of resistance around $41.00–$41.65. Sustained demand above these levels would add confidence that the long-term bull market is reasserting itself.

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