XAG/USD breaks the $80 barrier: How far will the silver rally go?

The silver market in speculative mode as value seekers bet on rate cuts

Silver continues to make history. After reaching $81.43—a new high of the year—the XAG/USD quote shows that precious metals are not willing to slow down, even with the dollar strong and Treasury yields rising. The movement responds to a lethal combination: ongoing geopolitical tensions, plus the growing expectation that the Federal Reserve might ease monetary policy in the last quarter of the year if employment continues to show signs of weakening.

Technical: Silver plays with fire in overbought territory

From a technical perspective, the outlook becomes complex. The RSI (Relative Strength Index) is already flirting with overheating, but here’s the interesting part: the strength of the upward move suggests that the rally still has room to run. If the RSI crosses the 80 line, then we will be talking about severe overbought conditions that could trigger a more aggressive correction.

The truth is that the prevailing trend remains upward, although the risk of a pullback is not ruled out. The million-dollar question: where does this gains train stop?

Objectives and critical levels to watch

Upward:

• First resistance: $81.44 (today’s high)
• Second resistance: $82.00
• Week’s close: $85.87 (all-time high)

Downward:

• Immediate support: $80.00
• Second level: $77.88 (January 5 high)
• Safety floor: $75.00

The price of silver will continue dancing between these lines as the market processes contradictory signals from the dollar, rates, and global monetary policy.