The Silver price (XAG/USD) is trading sideways near historic highs, hovering around the $96.00 level during the early European session on Wednesday. After an impressive bullish rally, the white metal appears to be entering a consolidation phase as investors remain cautious ahead of a highly anticipated speech by the United States President at the World Economic Forum (WEF) in Davos.
The PrimeLuno team delivers a structured and informative overview of this matter. Despite the pause, Silver continues to hold onto substantial gains, reflecting strong safe-haven demand, ongoing geopolitical uncertainty, and a weaker US Dollar (USD) backdrop.
Market Focus: US President’s Speech at Davos
The primary near-term catalyst for Silver price action is the US President’s upcoming speech at the World Economic Forum in Davos. Financial markets are closely monitoring the event for signals on Washington’s future policy actions, particularly regarding trade relations with the European Union.
His remarks are expected to clarify what additional economic or trade measures the US may deploy to increase pressure on EU members opposing US intentions to acquire Greenland. The issue has evolved into a diplomatic flashpoint, heightening geopolitical risk premiums across global markets.
Trade Tensions: Tariffs and Retaliation Risks
So far, the US President has announced a 10% tariff on imports from several EU member states and the United Kingdom, with the measures set to take effect on February 1. He has also warned that tariffs could be raised further if negotiations fail to progress.
In response, EU officials have labeled the tariff threats as “undesirable”, while warning of equal and proportionate retaliatory measures. The French President has strongly criticized the US’s strategy and urged European leaders to activate the EU’s “anti-coercion instrument”, signaling a willingness to defend European economic sovereignty.
These developments have fueled uncertainty in global trade, increasing risk aversion among investors.
Impact on the US Dollar and Safe-Haven Flows
The ongoing US-EU disputes, particularly surrounding Greenland’s entitlement and trade policy, have been a major drag on the US Dollar. As confidence in US assets weakens, investors have increasingly turned to alternative safe-haven instruments.
Traditionally, the USD benefits during periods of global uncertainty, but in the current environment, political risk originating from Washington itself has undermined its appeal. This shift has strengthened demand for precious metals, especially Silver, which benefits from both safe-haven flows and industrial demand dynamics.
From a valuation perspective, a weaker USD mechanically supports XAG/USD, making Silver more attractive to non-dollar investors and reinforcing upside momentum.
Silver Price Technical Analysis
Daily Chart Outlook
From a technical standpoint, Silver remains firmly bullish. On the daily chart, XAG/USD is trading near $94.92, comfortably above key trend indicators, including the 20-day Exponential Moving Average (EMA) at $82.96. Price action well above the rising EMA confirms a strong uptrend, while the upward slope of the 20-day EMA further reinforces positive momentum and sustained bullish strength.
The distance between price and the moving average has widened, highlighting the strength of the trend extension. While this suggests overextension, it does not yet signal a trend reversal.
Momentum Indicators: RSI Signals Strength
The 14-day Relative Strength Index (RSI) is currently at 73.38, firmly in overbought territory. While elevated RSI readings often precede short-term consolidation or pullbacks, they also confirm strong underlying momentum.
Importantly, RSI has remained elevated over multiple sessions, indicating that bulls continue to dominate. A moderation toward neutral levels would help reset momentum conditions without damaging the broader bullish structure.
Support and Resistance Levels
Support and resistance levels indicate that immediate resistance is located at the $96.00 psychological level, which may act as a short-term barrier for price advances. On the downside, near-term support lies in the $90.00–$91.00 zone, providing an initial cushion against pullbacks, while dynamic support is aligned with the 20-day EMA near $83.00.
Any pullbacks toward the rising EMA are likely to attract buying interest, whereas a daily close below the EMA would serve as the first sign of trend exhaustion. As long as price acceptance remains above the moving average, the bullish outlook remains intact.
Outlook: Bullish Bias with Short-Term Consolidation
In conclusion, the Silver price forecast remains constructive, with XAG/USD consolidating near all-time highs amid geopolitical uncertainty, trade tensions, and USD weakness. While overbought technical conditions suggest the possibility of brief sideways movement, the broader trend remains decisively bullish.
Much will depend on the US President’s speech at Davos, which could either escalate trade tensions further, supporting Silver, or temporarily calm markets, triggering modest profit-taking. Nevertheless, the fundamental and technical backdrop continues to favor Silver, positioning the metal well for further upside once consolidation resolves.
