Silver (XAG/USD) found support at the mid-range of $47.00 on Tuesday and rebounded strongly on Wednesday, with precious metals benefiting from risk aversion amid political uncertainty in Japan and France, as well as the ongoing US government shutdown.
The US political deadlock has entered its second week, with Senate Democrats and Republicans still unable to reach an agreement to restore government funding. Traders are increasingly pricing in a prolonged shutdown and are seeking refuge in safe-haven assets such as gold and silver.
Technical analysis: resistance at $49.25 may challenge bulls
The technical picture shows XAG/USD trading higher within an ascending channel that formed from mid-September lows. The 4-hour RSI indicates a bearish divergence, but strong fundamental support is limiting downside pressure for now.
To the upside, the next key target is the 161.8% Fibonacci extension of the September 17–24 rally, followed by the top of the channel at $49.65 and the psychological $50.00 level.
Support levels are at Tuesday’s low of $47.50 and the trendline near $47.10. Further down, the September 30 and October 2 lows around $45.90–$46.00 could attract attention.
