Silver Price Forecast: XAG/USD returns above $36.50 buoyed by a softer US Dollar

• Silver bounces up from $36.30 lows favoured by USDollar's retreat.
• Dovish Fed minutes and lower US yields are weighing on the Greenback on Thursday.
• XAG/USD needs to breach $36.80 and $37.25 to confirm the bullish bias.

Silver (XAG/USD) appreciated on Thursday, with precious metals drawing support from a somewhat weaker US Dollar, as Treasury yields dropped on the back of dovishly tilted FOMC minutes and a strong auction of US bonds on Wednesday.

The minutes of the last Federal Reserve meeting confirmed a deep divergence within the committee, with most members foreseeing at least one rate cut before the end of the year.

This, along with a successful auction of $39 billion worth of 10-year US Treasury bills, snapped a five-day rally in US yields, which undermined speculative demand for the US Dollar.

Technical Analysis: XAG/USD keeps trading within a bullish channel

Silver has been trading in a choppy and volatile manner over the last six weeks. Still, the immediate trend maintains a moderate bullish bias, with the pair trading within an ascending channel from its lows on June 24.

The 4-Hour Relative Strength Index rose above the 50 level, indicating improved bullish momentum. However, the precious metal needs to extend above the July 8 and 7 highs, at $36.90 and $37.25, respectively, to confirm the positive trend.

On the downside, a breach of the support area between the channel bottom, at $36.30 and the July 9 low at $36.15 would signal a trend shift and increase pressure towards the $35.65-$35.75 area , June 25. 27 and July 1 lows).