Silver Price Forecast: Bulls extend control as silver trades at multi-year highs

• Silver extends its rally for the fourth straight session, hitting the highest level since September 2011.
• Weaker US Dollar and falling Treasury yields underpin bullish momentum ahead of the Fed decision.
• Technical outlook remains strong, though RSI is near 75, signaling overbought conditions.

Silver (XAG/USD) continues its rally on Monday, building on last week's strong momentum to notch a fourth consecutive daily gain. The white metal is supported by a broadly weak US Dollar (USD) and retreating US Treasury yields as traders brace for a pivotal Federal Reserve (Fed) interest rate decision on Wednesday, where a 25-basis-point (bps) rate cut is fully priced in, but the real focus lies on how dovish the forward outlook will be.

At the time of writing, XAG/USD is trading around $42.62, up nearly 1% on the day and marking its strongest level since 6 September 2011. The weaker Greenback makes precious metals more attractive for non-USD holders, while falling real yields reduce the opportunity cost of holding non-interest-bearing assets like silver. Broader safe-haven demand and firm industrial consumption trends add to the supportive backdrop.

From a technical perspective, Silver remains firmly bullish, with price action holding well above key moving averages. The metal trades comfortably above its 21-day Simple Moving Average (SMA) at $39.96 and the 50-day SMA at $38.79, underscoring strong upside momentum. The Relative Strength Index (RSI) is around 75, deep in overbought territory but reflecting persistent demand, while the Average Directional Index (ADX) has risen to 31.98, confirming the strength of the prevailing uptrend.

On the upside, immediate resistance comes at the $43.00 psychological level, followed by $43.40, the peak from 5 September 2011. A sustained break above these barriers would open the door for a move toward $44.24, the high from 24 August 2011. On the downside, first support is seen at $41.50, followed by $40.50 and the $40.00 round figure.

Speculative positioning adds weight to the bullish tone but also raises caution. The latest CFTC Commitments of Traders (CoT) report shows non-commercial speculators holding 72,450 long contracts against just 18,513 shorts. Commercial participants, by contrast, remain heavily net short at 113,565 contracts.