Silver Price Forecast: XAG/USD soars 2% toward $39 on Dollar weakness

• Silver breaks above $38.50 as bullish RSI signals momentum toward key resistance.
• Weak US Dollar and improving market sentiment drive broad gains in precious metals.
• A move above $39.00 opens door to $39.50 and psychological $40.00 target.

Silver prices advance sharply over 2% on Monday as the North American session comes to an end, ahead of the open of the Sydney-Tokyo sessions. At the time of writing, the XAG/USD trades at $38.95 after bouncing off daily lows of $38.10 earlier in the day.

Broad US Dollar weakness, due to falling US Treasury yields and an improvement in risk appetite, sent the grey metal prices soaring, though Silver remains shy of testing the $39.00 figure.

XAG/USD Price Forecast: Technical outlook

Silver seems poised to challenge the yearly high at $39.12, after finally clearing the $38.00 and $38.50 figures on the day. The Relative Strength Index (RSI) shows that momentum is bullish with the RSI entering overbought territory but shy of reaching the most extreme level at 80.

That said, if XAG/USD surpassed $39.00, a test on the YTD high is on the cards at $39.12. Further upside is seen at $39.50 and at the $40.00 figure. Conversely, if Silver tumbles below $38.50, expect a test of the $38.00 mark, ahead of reaching the 20-day Simple Moving Average (SMA) at $37.16.

XAG/USD Price Chart - Daily