Silver price retreats from multi-year high due to Federal Reserve pause and profit-taking dampening rally

• Silver Prices Retreat from 12-Year High, XAG/USD Dips Below $37.32
• Bullish Long-Term Outlook for Silver Amid Geopolitical Risks and Supply Shortages
• Technical Indicators Suggest Potential Correction with Key Support at $35.30-$35.50

Following a remarkable surge to a 12-year peak, Silver (XAG/USD) has seen a slight decline, pulling back from Wednesday’s high of $37.32. The downturn occurs as traders take profits after the Federal Reserve’s decision to maintain interest rates, hinting at prolonged high borrowing costs which temporarily bolstered the US Dollar, impacting precious metals.

Currently, Silver trades around $36.35, down approximately 1.10% for the day, reflecting a shift from its strongest position since 2012. This adjustment is primarily due to profit-taking and a minor recovery in the US Dollar following the Fed’s cautious stance.

The dip in Silver prices comes despite ongoing support from factors such as persistent supply deficits and robust demand from safe-haven investors, driven by escalating tensions between Israel and Iran. These elements, coupled with strong industrial demand from sectors like solar energy and electric vehicles, continue to paint a bullish medium-term picture for Silver.

Technically, Silver maintains a positive outlook, though current indicators suggest a cooling momentum. The daily Relative Strength Index (RSI) shows a bearish divergence, signaling potential exhaustion in the recent price rally. Despite this, the Moving Average Convergence Divergence (MACD) remains in a bullish zone, albeit with diminishing strength.

The immediate support for Silver is identified in the $35.30-$35.50 range, closely aligned with the 21-day Exponential Moving Average (EMA) and a recent breakout point. A break below this support could lead to further declines towards the $34.50 support level, which has historically been a pivotal area for the metal.

Conversely, a resurgence above $36.50 could prompt Silver prices to challenge the recent highs near $37.30, with potential to extend gains if bullish momentum resumes.