Silver Price Forecast: XAG/USD hits 14-year highs amid trade war fears

• XAG/USD extends gains for the third straight session, holding near $38.60 after hitting a fresh 14-year high of $39.13 earlier today.
• Rising geopolitical uncertainty and trade war fears are driving investor demand for precious metals, helping Silver outperform despite elevated price levels.
• Focus shifts to US CPI data scheduled for Tuesday, which could sway Federal Reserve (Fed) rate expectations and influence the short-term direction of Silver prices.

Silver (XAG/USD) extends its winning streak for the third consecutive day on Monday, climbing to fresh 14-year highs near $39.10, amid rising global trade tensions and renewed safe-haven flows. Market sentiment soured after US President Donald Trump added the European Union (EU) and Mexico to his growing list of tariff targets, threatening to impose 30% duties on their imports starting August 1. The move has heightened fears of a broader trade war, prompting investors to seek refuge in precious metals as a hedge against uncertainty.

At the time of writing, Silver (XAG/USD) is hovering around $38.60 during the American trading hours, retreating slightly from the day's high of $39.13 marked earlier in the European session. The intraday top also stands near the metal's highest level since September 2011.

From a technical standpoint, Silver (XAG/USD) remains well supported within a rising parallel channel that has been intact since early April, reinforcing the broader bullish structure. The recent breakout above the $37.00-$ 37.30 resistance zone marks the end of a multi-week consolidation phase and signals renewed bullish momentum. The price is now comfortably trading above the 9-day Exponential Moving Average (EMA) at $37.36, suggesting buyers remain in control.

The Relative Strength Index (RSI) has surged into overbought territory, currently positioned around 73.15, which may limit immediate gains or trigger minor pullbacks. That said, the overbought signal in a strong trend can also be seen as confirmation of bullish momentum. Meanwhile, the Average Directional Index (ADX) sits at 15.65, indicating that trend strength is still developing despite the sharp rally.

Looking ahead, sustained strength above $38.50 could pave the way for a test of the psychological $40.00 mark, with bullish momentum likely to persist as long as Silver holds above its recent breakout levels. On the downside, initial support is seen near $37.30, followed by the former range low around $35.50, which also aligns closely with the lower boundary of the ascending channel near $35.25. A decisive break below this zone could signal a deeper corrective move.

Meanwhile, traders will keep a close eye on the upcoming US Consumer Price Index (CPI) data due on Tuesday, which could influence the Federal Reserve's interest rate outlook and, in turn, impact the near-term direction for Silver.