The silver (XAG/USD) market has entered a consolidation phase, pausing just beneath the psychologically and technically significant $37.00 level. Despite the sideways price action, market structure and momentum indicators continue to support an upward trajectory in silver prices. Servelius professionals outline the key points of this topic in the following article.

Double-Bottom Formation Signals Strength

The most compelling technical pattern currently developing on the silver chart is the double-bottom formation, which has formed near a critical support zone around the $35.82–$36.00 area. This is a classic reversal pattern, typically signaling that bearish momentum has exhausted and that a bullish breakout may be on the horizon.

This structure gains importance considering the broader macroeconomic backdrop, where inflation concerns, geopolitical uncertainties, and safe-haven demand continue to underpin precious metals. As such, the XAG/USD is maintaining a constructive tone despite near-term consolidation.

Doji Candle Reflects Market Indecision

The daily candle printed a doji, a technical signal characterized by a small body and long wicks, which often suggests indecision in the market. However, in the context of a strong preceding uptrend, a doji typically indicates a temporary pause rather than a complete trend reversal. With US markets closed and volumes significantly reduced, the formation must be interpreted with caution.

Traders appear to be digesting recent gains, waiting for confirmation signals before initiating fresh positions. Yet, the doji, occurring at a key resistance level, aligns with the broader bullish narrative, reinforcing the idea that the market is coiling for a potential breakout.

RSI and Momentum Outlook: Bullish Tilt

The Relative Strength Index (RSI) continues to hover in bullish territory, signaling that upward momentum remains intact. While the RSI has not entered overbought conditions, its sustained presence above the 50-midline indicates that bulls retain control of the trend.

Volume metrics, although temporarily distorted by the holiday lull, have previously confirmed bullish intent. With buyers stepping in on dips and sellers struggling to maintain pressure, the technical structure remains supportive of higher prices in the medium term.

Resistance Levels: $37.00, $37.31, $37.49, and $38.00

The immediate resistance zone lies at $37.00, a round number and a psychologically important level. A decisive daily close above this figure could trigger technical buying, especially from trend-following algorithms and discretionary traders who follow breakout strategies.

Beyond that, the next significant hurdle is the year-to-date high at $37.31, closely followed by $37.49, a historical pivot dating back to February 29, 2012. A breach of this zone would be interpreted as a major bullish confirmation, potentially opening the doors toward $38.00, a milestone not seen in over a decade.

Each of these resistance levels aligns with historical price memory, where previous buying or selling interest has left technical footprints. As silver approaches these zones, volatility is expected to rise, and volume expansion would be a key confirming factor for any breakout.

Downside Risk: Watch $36.00 and Below

Despite the optimistic technical outlook, traders must remain cautious. A break below $36.00 would undermine the short-term bullish setup, especially if accompanied by strong volume. In such a case, bears could aim for the support at $35.82, which aligns with the lower end of the recent double-bottom.

Should selling pressure intensify below $35.82, the next target lies at $35.00, a psychologically significant level. Beyond that, the 50-day Simple Moving Average (SMA), currently positioned at $34.39, would act as a deeper support, and potentially a trend-defining level.

Fundamental Context: US Trade Headlines Add Noise

In the background, headlines around the US trade war and the passage of the One Big Beautiful Bill have injected a degree of uncertainty into the markets. While silver often benefits from risk-off sentiment, traders are currently caught between macro narratives and technical signals.

The approval of the bill, while not directly impacting silver, has rekindled debates over global trade policies and inflationary pressures, both of which are supportive of precious metals as alternative stores of value.

Conclusion: Bullish Bias Intact Despite Pause

The XAG/USD has entered a technical pause beneath key resistance at $37.00, with thin holiday trading likely muting real market direction. However, the underlying technical posture, characterized by a double-bottom, bullish RSI, and favorable chart structure, suggests that silver is preparing for another leg higher.

If bulls manage to decisively clear $37.31, the breakout could extend toward $37.49 and $38.00, supported by both technical conviction and a favorable macro backdrop. On the downside, $36.00 remains the critical level to watch, as a breach could reintroduce short-term bearish pressure.