Silver Price Forecast: XAG/USD is testing the top of a potential Bullish Flag at $36.60

Silver consolidates above $36.00 with the upside trend intact.
Risk-off markets and higher demand for safe havens are supportive of precious metals.
XAG/USD is forming a potential Bullish Flag.

Silver (XAG/USD) is on a downside correction from all-time highs, near $37.00 hit on Early June. Price action is moving within a descending channel, which could turn into a bullish flag if the trendline resistance, now at $36.60, gives way.

The fundamental context is supportive. Investors are looking for safety as the war between Israel and Iran escalates. Trump has left the G7 meeting ahead of schedule and urged the National Security Council to be prepared on his arrival in Washington in a move that has boosted concerns that the US might be involved in the war.

Market movements, however, remain limited, with investors looking from the sidelines ahead of a string of central bank decisions, including the Federal Reserve, due later this week.

XAG/USD bulls are focusing on the $37.00 resistance area

Technical studies suggest a potential bullish flag in progress, with its top at the mentioned $36.60 level, which is being tested at the moment of writing ahead of the $37,00 all-time high reached on June 9.

Above here, the 161.8% Fibonacci extension of the June 9 to June 11 bearish correction is at $37.85. The 261.8% extension of the mentioned range is at $39.35, right below the measured target of the bullish flag, at 39.55.

On the downside, immediate support is at the $36.10 level (June 11 and 13 lows) above $35.40 (June 12 low). A bearish reaction below here would cancel this view and bring the June 4 low, at $34.20, back into play.

XAG/USD 4-Hour Chart