XAG/USD consolidates above 21-day EMA as momentum fades

• Silver retreats from intraday high of $36.84, currently trading around $36.40.
• XAG/USD holds above 21-day EMA, rising wedge formation still intact.
• Breakdown below wedge support exposes downside toward $35.00-$34.80.

Silver (XAG/USD) is navigating a choppy session on Thursday, reversing course during the early American trading hours after drifting modestly higher through the day. The metal remains supported by broad-based US Dollar weakness, which intensified following fresh criticism of Federal Reserve (Fed) Chair Jerome Powell by President Donald Trump.

Silver is drifting lower from an intraday peak of $36.84, with XAG/USD trading around $36.40 at the time of writing. The pullback comes after a series of key US economic data releases, which stirred some intraday volatility.

The US economy contracted by 0.5% in Q1 2025, marking its first quarterly decline in three years, as consumer spending and exports were sharply revised lower. Meanwhile, initial jobless claims fell by 9000 to 236,000 last week, offering a modest sign of labor market resilience. Elsewhere, US factory orders surged 16.4% MoM in May--well above forecasts--while the goods trade deficit widened to $96.6 billion, signaling renewed external pressure. While the broader macroeconomic picture suggests a slowing economy, the resilience in select data points has sparked some profit-taking in silver.

Meanwhile, the underlying demand for Silver remains well-supported by strong investor flows and resilient industrial usage. Holdings in silver-backed Exchange Traded Funds (ETFs) have climbed steadily over recent weeks, reflecting renewed interest from both institutional and retail investors amid growing expectations of Fed rate cuts later this year. Meanwhile, net speculative long positions in COMEX silver futures remain elevated, underscoring bullish sentiment across broader markets. On the industrial side, demand remains driven by robust activity in the solar energy and electric vehicle sectors. The ongoing supply deficit in the physical silver market further underpins the bullish outlook, keeping downside moves shallow and well-contained.

From a technical standpoint, Silver (XAG/USD) remains in a consolidative phase after peaking near $37.00 last week. The metal briefly tested the lower boundary of a rising wedge formation on Wednesday, managed to hold above it, keeping the broader bullish structure intact for now. XAG/USD is currently trading around $36.40, well above the 21-day Exponential Moving Average (EMA) at $35.66, which continues to act as dynamic support.

The RSI at 61.47 suggests bullish momentum is still present but beginning to cool, with no immediate overbought signals. The Average True Range (ATR) at 0.79 indicates shrinking volatility, reflecting consolidation.

The 10-day momentum indicator, which measures the rate of change in price, has flattened out near zero, signaling a loss of directional conviction among short-term traders. A decisive break below the wedge support could expose Silver to a pullback toward the $35.00-$34.80 zone, while a sustained move above $36.85 would clear the path for a retest of the recent multi-year high near $37.40.