Silver Price Forecast: XAG/USD consolidates near $39.00, bulls target multi-year high

• Silver consolidates near $39.00 after hitting a one-month high of $39.12 earlier in the session.
• The US Dollar remains under pressure despite upbeat GDP data, offering support to non-yielding assets such as Silver.
• XAG/USD confirms a bullish breakout, holding above key moving averages after a successful retest of the triangle pattern.

Silver (XAG/USD) is consolidating gains near one-month highs on Thursday, following a successful retest of former triangle resistance around $38.00. Wednesday's rebound confirmed the breakout structure and helped reinforce bullish momentum, supported by a softer US Dollar (USD). With XAG/USD holding above key moving averages, the near-term technical outlook remains constructive for bulls.

At the time of writing, XAG/USD is trading near $38.90, having reached an intraday high of $39.12, its strongest since July 25. The metal continues to benefit from a softer Greenback, which remains under pressure as traders digest a fresh batch of US economic data, with market participants reassessing the Federal Reserve's (Fed) monetary policy path following a mix of solid growth and easing inflation signals.

Thursday's macro data offered a mixed signal for policy expectations. The second estimate of US Q2 Gross Domestic Product (GDP) showed a slightly stronger 3.3% annualized expansion, up from 3.0% previously and marginally above the 3.1% consensus. Meanwhile, weekly Initial Jobless Claims ticked down to 229,000, suggesting continued labor market resilience. However, preliminary Q2 Core Personal Consumption Expenditure (PCE) came in at 2.5% QoQ, softer than the 2.6% forecast, while the GDP Price Index and headline PCE both eased to 2.0% from 2.1%.

From a technical standpoint, Silver confirmed a bullish breakout above a symmetrical triangle on the 4-hour chart, as price surged past the triangle's upper boundary and key moving averages. The move follows Wednesday's successful retest of the breakout zone near $38.00, which held firm thanks to support from the 100-period Simple Moving Average (SMA) and a recovery in bullish momentum.

The breakout was reinforced by a close above the 21-period Simple Moving Average (SMA) at $38.65, while the 100-SMA near $38.19 continues to act as dynamic support. These levels now serve as the first defense zones should the market correct lower in the near term. On the upside, immediate resistance is seen at the intraday high of $39.12. A sustained break above this level would pave the way for a test of the multi-year peak near $39.53.

Momentum indicators support the bullish bias. The Relative Strength Index (RSI) has climbed to 59.99, suggesting growing upward momentum but still shy of overbought conditions. The Moving Average Convergence Divergence (MACD) indicates a clear bullish crossover, with the MACD line above the signal line and the histogram displaying green bars, underscoring that bullish momentum is gaining traction.