Silver Price Forecast: XAG/USD rallies to fresh long-term highs at $49.00

• Silver extends gains on risk aversion and reaches fresh highs at $49.00.
• Concerns about fiscal spending in Japan, the political crisis in France, and the US shutdown are boosting precious metals
• XAG/USD's next resistances are at $49.25 and $ 49.65 ahead of the $50.00 level
  

Silver (XAG/USD) correction found support at the mid-range of 47.00 on Tuesday and bounced up strongly on Wednesday, with precious metals buoyed by risk aversion amid political woes in Japan and France and the US government shutdown.

The US political impasse entered its second week with Senate Democrats and Republicans unable to find a way to restore government funding. Traders are starting to come to terms with a prolonged shutdown and are seeking shelter in safe-haven assets, such as precious metals.

Technical analysis: Resistance at $49.25 might challenge bulls

The technical picture shows the pair trading higher within an ascending channel from mid-September lows. The 4-Hour RSI reflects a bearish divergence, but the supportive fundamental context is keeping downside attempts limited for now.

To the upside, the next target is the 161.8% Fibonacci extension of the September 17 to September 24 rally, ahead of the top of the mentioned channel, at  $49.65 and the $50.00 psychological level.

Supports are at Tuesday's low of $47.50 and trendline support, at $47.10. Furhrer down, the September 30 and October 2 low, at the $45.90-$46.00 area would come into focus.

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