During early trading on July 20, silver staged a significant technical rebound, jumping by approximately 1.7% to $56.870 per ounce. What’s more interesting is that the white metal is now outpacing its yellow counterpart due to rising industrial demand and XAGUSD’s recovery from a local bottom.
Bollinger Bands confirm this dynamic. The narrowing channel suggests reduced volatility, with the upper limit at $63.836, the midline at $59.301, and the lower one at $54.765. After pushing off the floor, prices moved toward the mid-channel zone—a telltale sign of a rebound following oversold conditions. However, a full-fledged reversal has yet to occur. First, silver needs to settle firmly above $59.300.
For further confirmation, let’s turn to the Stochastic Oscillator. Both of its lines are sitting near oversold territory, extremely close to each other and reversing upward. How to interpret their behavior? This points to a technical nature of the rebound—a corrective move after the recent decline. The Chaikin Oscillator tells the same story. The indicator is still in the red, hinting at bearish volume dominance, but it did not update early July lows during Friday’s drop, which is a good sign. This forms a bullish divergence: prices fell while selling pressure on the volume chart eased, with the most recent bars turning upward in sync with the quotes.
On the fundamental side, everything looks darker. A domino effect has recently come into play: escalating tensions between the United States and Iran have pushed crude prices higher, triggering inflation risks and the probability of a September rate hike by the Federal Reserve (Fed). These factors have weighed heavily on the market, creating even more uncertainty and stealing the spotlight from non-yielding assets, such as precious metals.
Take into account the following trading strategy:
Sell silver during a rebound near $58.950. Place Take profit at $55.300. Set Stop loss at $61.000.
The forecast is valid between July 20 and July 27, 2026.
This content is for informational purposes only and is not intended to be investing advice.
